June 8 (Reuters) – The Russian ruble resumed gains on Wednesday, heading towards 60 to the dollar, despite Russia’s decision to ease some capital controls and expectations of an interest rate cut during of an upcoming central bank meeting.
At 07:43 GMT, the ruble was 1% stronger against the dollar at 60.45 on the Moscow Stock Exchange. It has stabilized in the relatively narrow range of 60.0 to 62.5 over the past few days after rapid swings in May.
It strengthened by nearly 2% to 64.40 against the euro.
The ruble is led by capital controls that Russia imposed in February after sending tens of thousands of troops to Ukraine on Feb. 24.
After the Russian currency strengthened to a nearly five-year high against the euro last month, Russia eased some capital controls.
On Tuesday, Russia allowed export-focused companies to transfer currency to their overseas accounts under certain conditions, a move seen as aimed at helping pay for imports and preventing the ruble from strengthening.
At the same time, the central bank raised the ceiling on cross-border transactions for individuals, saying that Russian residents and non-residents of “friendly” states would be able to send abroad the equivalent of 150,000 dollars per month, up from the previous one. $50,000 limit.
“The ruble rate is still determined mainly by the trade balance, where the situation does not really change: exports remain relatively high, while imports have collapsed,” said Evgeny Suvorov, economist at CentroCreditBank.
The ruble may come under some downward pressure due to lower interest rates in the country. A majority of analysts polled by Reuters expect a 100 basis point cut to 10% as the bank tries to make loans more affordable amid sluggish consumer demand and a pause in inflation .
Sanctions and Russia’s efforts to honor its sovereign debt obligations remain a focus.
European Union countries last week agreed on their sixth round of sanctions against Moscow over what it calls its ‘special military operation’ in Ukraine, including the phasing out of all imports of Russian crude oil and petroleum products transported by sea in six to eight months.
Russian stock indices were up.
The dollar-denominated RTS index rose 2.7% to 1,212.3 points. Russia’s ruble-based MOEX index rose 1.2% to 2,320.4 points. (Reporting by Reuters)