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A Turbulent week marked

Rolls of Russian rouble currency are depicted in a photograph on a table in Warsaw, Poland, on January 22, 2016.

Analyzing tux news, December 23, Moscow - At the close of a turbulent week marked by concerns about the effects of oil and gas sanctions, the rouble recovered some of its early losses versus the dollar to post tentative gains on Friday. This support came from the month-end tax period.

The oil embargo and price cap that threaten Russia's export revenue have caused the rouble to lose about 6% this week and more than 11% so far in December, but it almost still holds the record for the best-performing major currency in the world this year.

By 1359 GMT, the rouble had recovered from its lowest level since April 28 of 72.6325 and was 0.3% stronger against the dollar at 68.79.

It had increased 1% to trade at 72.85 against the euro and decreased 0.1% to 9.78 against the yuan.

On Thursday, the Moscow Exchange saw yuan-rouble trading volumes surpass 15 billion yuan, setting a record.

If oil and gas revenue exceeds forecasts, Russia will begin purchasing yuan on the open market in 2019, according to two people who spoke to Reuters.  

Finance Minister Anton Siluanov later confirmed the information.

The decline in the ruble, according to Siluanov, was partly caused by a rebound in imports, which had dropped as Western nations slapped tough sanctions on Moscow due to its activities in the Ukraine, as well as what he called the "moral impact" of oil and gas limitations on traders.

According to Elena Kozhukhova, an analyst at Veles Capital, "it is likely that the market has overstated the adverse effect of the imposed sanctions and will return to a more bullish appraisal of the rouble's prospects."

The price of Brent crude oil, the primary export from Russia, increased 2.4% to $83.0 per barrel.

Next week, when month-end taxes are due, the rouble should gain traction as Russian exporters typically use FX profits to settle domestic debts.

In a study, the Bank of St. Petersburg stated that exporters' increased foreign currency sales in anticipation of Monday's tax season peak "facilitated the corrective (move) in the exchange rate."

The Russian stock indexes were inconsistent

The RTS index (.IRTS) in US dollars increased by 0.3% to 961.2 points. The MOEX Russian index (.IMOEX), which is based on the rouble, was unchanged at 2,114.0 points.

According to a Reuters poll released on Friday, Russia will have little room to lower interest rates in 2023 as long as inflation stays over goal and the country's economy continues to decline.

Alexander Marrow did the reporting

Andrew Heavens and Jason Neely did the editing : source news reuters.com