Ruble strengthens as Macron visit signals easing of Ukraine tensions

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The French president’s trip to Moscow and rising oil prices have given a boost to the Russian currency

The Russian ruble strengthened 0.3% on Monday, climbing to 75.60 against the US dollar and by 0.6% to 86.43 against the euro, hitting its strongest level against the greenback since January 13.

The currency is recovering after sinking to a nearly 15-month low of 80.41 per US dollar last month amid US accusations that Russia was planning to invade neighboring Ukraine and face harsh sanctions as a consequence.

This shot in the arm came ahead of a meeting between the Russian and French presidents in Moscow. Ahead of his trip to the capital, Emmanuel Macron expressed optimism that he could secure a “de-escalation” of tensions surrounding Ukraine, arguing that Russia is not interested in invading its neighbor – something Moscow has been saying all along. Ahead of talks with President Putin, Macron spoke to US President Joe Biden on Sunday in a coordination move.

Another factor contributing to the strengthening of the ruble is the high price of oil, Russia’s main export. Brent crude – a major benchmark for the price of Russian crude – has climbed around 20% since the start of this year. On Monday it traded near $94 per barrel, its highest level since October 2014. The rise comes as global consumption remains strong, but oil stockpiles have plummeted since last year as many major producers struggle to pump more.

The Central Bank of Russia is also expected to raise its key interest rate from 8.5% on Friday as it works to control inflation. Higher rates make investment into ruble-denominated assets more attractive, strengthening the Russian currency.

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