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MOSCOW, Aug 18 (Reuters) – The Russian ruble stabilized and stocks were flat on Thursday, lacking fresh momentum in summer trading, as bond prices edged higher after inflation data showed supported expectations of a further rate cut by the central bank.
At 07:59 GMT, the ruble was little changed over the day at 60.77 against the dollar and down 0.2% to 61.78 against the euro.
Supported by capital controls, the ruble has become the best performing currency in the world this year and should soon find more support thanks to month-end tax payments which generally encourage exporters to convert part of their income into currencies.
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Ruble volatility eased after wild swings that saw it hit a record low of 121.53 to the dollar on the Moscow Stock Exchange in March, days after Russia sent in tens of thousands of troops in Ukraine on February 24, then agree to a seven-year contract. peak of 50.01 in June.
In the bond market, yields on two-year OFZ Treasuries, which move inversely to their prices, slipped to 8.90% from Wednesday’s close of 9.01% after data showed that consumer prices in Russia had fallen for the sixth week in a row.
“If this trend does not reverse in September, we could see a further rate cut at the next CBR meeting,” BCS Global Markets said in a note.
The central bank last cut its benchmark rate to 8% in July and said it would study the need for further cuts as inflation slows and an economic contraction continues longer than expected. thought so before. Read more
Rate cuts are pushing bond prices higher and easing upward pressure on the ruble by making deposits less attractive, while supporting the stock market as investors seek more high-yielding assets to park their funds.
The dollar-denominated RTS index (.IRTS) fell 0.05% to 1,135.9 points. Russia’s ruble-based MOEX index (.IMOEX) rose 0.1% to 2,190.8 points.
“The Russian market is still moving in a sideways trend with no trend reversal drivers visible yet,” BCS Global Markets said.
For the guide to Russian stocks, see
For Russian Treasury bonds, see
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Reporting by Andrey Ostroukh Editing by Tomasz Janowski
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