Russian rouble steadies ahead of expected rate cut

pMovements on the Russian market are partly artificial as the rouble is propped up by capital controls, while stocks are trading with a ban on short selling and with foreign players barred from ditching shares in Russian companies without permission.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pAt 0749 GMT, the rouble was 0.5 stronger against the dollar at 71.69 and was steady against the euro, trading at 75.40, near levels last seen more than two years ago.p

pThe rouble has firmed in the past few days as exportfocused companies were selling their foreign exchange revenues to meet local liabilities that could exceed 3 trillion roubles 43.26 billion this month, according to analysts surveyed by Reuters.p

pThe Bank of Russia is expected to cut its key interest rate by 200 basis points to 15 as it tries to stimulate more lending in the economy in the face of high inflation, a Reuters poll suggested earlier this week.p

pThe rate decision is due at 1030 GMT, followed by a media briefing with Governor Elvira Nabiullina at 1200 GMT.p

pLower rates support the economy through cheaper lending but can also fan inflation and make the rouble more vulnerable to external shocks.p

pThe rouble has fully recovered to levels seen before Feb. 24, when Russia started what it calls “a special military operation” in Ukraine that led to unprecedented western sanctions, including a freeze on Russia‘s reserves and efforts to limit Russian banks’ access to the global financial system.p

pRussian stock indexes were higher.p

pThe dollardenominated RTS index was up 1.6 at 1,058.1 points. The roublebased MOEX Russian index was 1 higher at 2,408.4 points.p

pShares in VTB Bank outperformed the wider market, climbing 2.3 on the day after the Kommersant daily reported, citing sources, that the countrys secondlargest lender may merge with statecontrolled banks Otkritie and RNCB.p

pPromsvyazbank analysts said the move would likely improve VTB Groups performance and the companys share price, as well as allow the banks to optimise their branch network. p

pFor Russian equities guide seep

pFor Russian treasury bonds seep

p1 69.3488 roublesp