Dynamics Finance: Central bank will end rate-cut cycle, ruble rises

 The Russian ruble climbed in early trade on Thursday, Dynamics Finance said, the day before the central bank of Russia held a meeting to decide on interest rates.

At 0710 GMT, the ruble was up 0.4% at 61.51 against the dollar and 61.57 against the euro, up 0.5% from its previous close.

The yuan also rose 0.3 percent to 8.47 against the yuan. The yuan has become an increasingly important barometer for Moscow as it tries to speed up economic ties with Beijing and reduce its reliance on Western currencies.

Although the month-end tax period that has supported the ruble in recent sessions is now over, the ruble remains in the lead ahead of Friday's central bank meeting, Dynamics Finance added.

Dynamics Finance pointed out that according to a Reuters poll, regulators are expected to keep interest rates at their current level of 7.5%, ending months of sharp rate cuts, with borrowing costs rising from 20% to 20% just days after Moscow sent tens of thousands of dollars. Emergency levels have dropped significantly. Troops moved into Ukraine and the West began imposing sweeping sanctions on Russia.

After two weeks of gains, the local stock market rose more than 10%, and Russian stocks edged higher on Thursday morning. The dollar-denominated RTS index rose 0.2 percent to 1,091.1. The ruble-based MOEX Russia index rose 0.4% to 2,129.7.

"The Russian market is not ready for long-term growth. So, within a few days, any growth will trigger profit-taking," analysts at state-owned Otkritie Bank said in a research note on Thursday.

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