Russian ruble firms sharply as government pressures exporters
By Vladimir Abramov and Alexander Winning
MOSCOW (Reuters) - Russia's ruble strengthened sharply on Wednesday after dramatic falls on the previous two days as the government pressured exporters not to hoard foreign-currency earnings and the central bank announced new measures to support financial stability.
The ruble was around 9 percent firmer against the dollar in volatile trading, with the market also boosted by central bank plans to ease concerns over approaching external debt repayments by Russian firms and stabilize the ruble.
Traders also saw targeted sales of foreign currency by exporters, in part because of upcoming monthly tax payments.
At 1030 ET, the ruble was up 9 percent at 61.50 rubles per dollar on the Moscow Exchange and was around 10 percent stronger versus the euro at 76.55.
The ruble has come under heavy selling pressure this week, falling around 20 percent against the dollar at one stage on Tuesday, sparking fears of financial meltdown, despite the central bank hiking its key interest rate by 650 basis points.
The situation poses a major challenge for President Vladimir Putin whose popularity, based partly on providing stability and prosperity, is at risk from a ruble decline that is damaging Russia's credibility among investors.
"Sooner or later they'll flood the market with foreign currency, that's what the market expects. We're awaiting foreign currency from exporters, the finance ministry and central bank," said Igor Akinshin, a forex trader at Alfa Bank in Moscow.
Prime Minister Dmitry Medvedev called on Russia's top exporters on Wednesday to behave "responsibly" with their forex revenues after meeting with the heads of state exporters including Gazprom and Rosneft. Continued...