The Russian rouble has risen by 7% to 83 against the dollar before paring gains, touching heights that were seen before its invasion of Ukraine.
The Russian stock market has gradually reopened after it was suspended.
In offshore trade, the Ruble was weaker, and hovered at 87 to the dollar on the EBS electronic platform.
The rise of the Rubles was driven by two powerful factors – Russia switching to Rubles for gas exports and Russian export firms being converting 80% of their foreign currency earnings into Rubles, as per the Russian cenral bank’s mandate. Both moves have supported the Russian currency, opined Iskander Lutsko, chief investment strategist at ITI Capital.
“The market now really depends on progress in negotiations between Russia and Ukraine,” said Lutsko.
Russian stocks were trading in curtailed sessions and with various restrictions, including a ban on short-selling. Non-residents are barred from selling stocks and OFZ rouble bonds until April 1.
While the dollar-denominated RTS index finished the shorter session up by 7.1% at 881.6 points, the rouble-denominated MOEX Russian index pared early gains to shed 0.9% to 2,408.5 points.
While Moscow-listed shares and depositary receipts of some companies with primary listings abroad returned to trading, Nasdaq-listed tech giant Yandex saw its Moscow shares climb by 4.6%, while depositary receipts in London-listed retailer Fix Price jumped by 13.2%.
“Market participants are probably over-valuing the company after the work of rival social networks was restricted in Russia,” said BCS analysts.
In a statement, Russia’s Finance Ministry said, it had fully paid a coupon on its Eurobond due in 2035, its third payout since unprecedented Western sanctions called Russia’s ability to service foreign currency debt into question.
Yields on Russia’s benchmark 10-year OFZ treasury bonds dropped to 12.68%, moving further away from last week’s record high of 19.74%, which was just below the central bank’s key interest rate. Yields move inversely to prices.