The Russian rouble strengthened sharply on Thursday, soaring past the 78 mark against the dollar to reach a two-year high, after Moscow proposed a fresh round of peace talks with Kyiv.
The rouble has firmed by more than 40% against the dollar this year, a rise analysts have attributed to the easing of geopolitical tensions – mainly with U.S. President Donald Trump’s administration – and the central bank’s tight monetary policy, which has reduced demand for foreign currency.
By 0843 GMT, the rouble was up 1.3% at 78.80 per U.S. dollar, LSEG data based on over-the-counter quotes showed, earlier hitting 77.95, its strongest since May 29, 2023.
Russia on Wednesday proposed holding the next round of direct talks with Ukraine on June 2 in Istanbul. Kyiv has yet to respond to the proposal.
Trump, meanwhile, said he was not yet prepared to impose new sanctions on Russia because he did not want the penalties to scuttle a potential peace deal.
That news backdrop, as well as Russia saying it had completed a draft peace memorandum, contributed to the rouble’s strength, said Promsvyazbank’s Yevgeny Loktyukhov, along with an uptick in oil prices.
Brent crude oil, a global benchmark for Russia’s main export, was up 1.2% at $65.68 a barrel.
The improvement of the geopolitical background and the situation on oil markets should compensate for the traditional month-end foreign currency supply squeeze after tax payments are made, said Loktyukhov.
Exporters usually convert their foreign currency earnings into roubles to pay local liabilities at the end of each month, buttressing the Russian currency.
Against the Chinese yuan, the rouble was up 1% at 10.90 on the Moscow Stock Exchange. Russia’s central bank uses yuan for foreign exchange interventions, and it is the most traded foreign currency in Russia.
(Reporting by Alexander Marrow Editing by Toby Chopra and Gareth Jones)