R rouble gains as volatile year draws to a close

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R rouble gains as volatile year draws to a close

Sheets of the newly designed Russian 100 rouble banknotes are seen at the Goznak printing factory in Moscow.

MOSCOW Reuters- The rouble strengthened on Friday, heading for the 71 mark against the dollar, as a volatile year drew to a close, with the final month of trading being dominated by fears over the impact of a Western oil price cap on Russia's export revenues.

The rouble was 1.3% stronger against the dollar at 71.22 at the time of 0708 GMT, recovering some ground from the eight month low of 72.9175 hit in the previous session.

Since the price cap on Russian oil exports came into force on December 5, the rouble has lost 13% to the dollar, but analysts have said the technical impact will be more strongly felt in January-February.

It had gained 0.6% to trade at 75.54 against the euro and was down 1.7% against the yuan to 10.01.

The finance ministry said on Friday that the maximum possible share of Chinese yuan in its National Wealth Fund NWF had been doubled to 60% as it restructures its rainy-day fund to reduce dependence on currencies from so-called unfriendly nations.

Recovering imports collapsed in the wake of Russia sending tens of thousands of troops into Ukraine as the West imposed sanctions and companies left the market, which has also contributed to the rouble's weakening.

The current account surplus could be at a historically high level, providing the rouble some support, said Dmitry Polevoy, head of investment at Locko Invest.

We estimate that the average cost for 2023 ranges from 67.4 to 81.1 per dollar. The price of crude oil, a global benchmark for Russia's main export, was up 0.6% at $84.0 a barrel.

President Vladimir Putin signed a decree that bans supply of crude oil and oil products from Feb. 1 for five months in countries that abide by it, as part of Russia's long-awaited response to the price cap.

The dollar-denominated RTS index was up 1.6% to 951.8 points. The Russian MOEX index was higher at 2,151, a 0.2% increase in rouble-based MOEX. 1 points.