May 7, 2020 / 4:38 PM / 23 days ago

UPDATE 1-Rouble firms on global risk appetite, shrugs off new coronavirus cases

(Adds detail, updates prices)

MOSCOW, May 7 (Reuters) - The Russian rouble firmed on Thursday, buoyed by global risk appetite after stronger-than-expected Chinese export data and shrugging off a rise in new Russian coronavirus cases which is fuelling concern about the economic impact.

At 1548 GMT, the rouble was 1.3% stronger against the dollar at 73.63 after a jittery few days amid Russia’s long May holidays when trading activity usually wanes.

Versus the euro, the rouble gained 1.2% to 79.53 .

Officials have said Russia plans to ease its coronavirus restrictions in three stages. But Moscow will keep on observing self-isolation measures even when some restrictions are eased from May 12.

Russia’s coronavirus cases overtook France and Germany to become the fifth-highest number in the world after a record daily rise on Thursday. Moscow said the real figure, not captured by official statistics, was much higher.

“The failure of the Russian authorities to contain the virus outbreak and the lack of urgency with which policymakers have stepped up fiscal support has made us increasingly concerned about a prolonged economic downturn and a weaker recovery,” research firm Capital Economics said in a note.

Russian services activity dived to a record low in April as emergency restrictions closed businesses and caused demand to plummet, a PMI business survey showed on Thursday.

“In such conditions, a double-digit contraction in GDP is expected in the second quarter, so the central bank needs to actively lower rates,” said Dmitry Polevoy, chief economist at the Russian Direct Investment Fund.

The central bank said on Thursday an expected easing of coronavirus restrictions that may be possible in June could create conditions for an economic recovery in the third quarter.

The central bank last slashed its key rate to 5.5% in April and promised more cuts later this year. Central Bank Governor Elvira Nabiullina will hold a weekly media conference on Friday where she is expected to elaborate on her bank’s plans.

Russian stock indexes finished the day in the positive territory. The dollar-denominated RTS index rose 1.4% to 1,126.5 points. The rouble-based MOEX Russian index was 0.1% higher at 2,634.0 points.

For Russian equities guide see

For Russian treasury bonds see (Reporting by Andrey Ostroukh, editing by Larry King)

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