* This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine
MOSCOW, July 15 (Reuters) – The rouble firmed towards 58 against the dollar and euro on Friday after a volatile start to the session, supported by the beginning of a favourable tax period but held back by profit taking after strengthening for most of the week.
At 0748 GMT, the rouble was 0.1% stronger against the dollar at 58.26, sliding to as low as 59.0525 in early trade, and had gained 0.7% to trade at 58.36 versus the euro .
The rouble is set to see extra support later this month as export-focused companies usually step up conversion of their forex revenues to meet local liabilities. Tax payments start on Friday and the bulk of payments are due in the last week of July.
“In the coming days, we expect the Russian currency to strengthen in light of the approaching tax deadline,” said Alor Broker in a note.
Against the current geopolitical backdrop, profit-taking is relatively common going into the weekend as market players seek to close long rouble positions.
The rouble became the world’s best-performing currency https://amers2.apps.cp.thomsonreuters.com/Apps/NewsServices/mediaProxy?apiKey=6d416f26-7b24-4f31-beb6-1b5aa0f3fafb&url=http%3A%2F%2Ffingfx.thomsonreuters.com%2Fgfx%2Frngs%2FGLOBAL-CURRENCIES-PERFORMANCE%2F0100301V041%2Findex.html this year, boosted by measures – including restrictions on Russian households withdrawing foreign currency savings – designed to shield Russia’s financial system from Western sanctions imposed after Moscow sent troops into Ukraine on Feb. 24.
The currency has also benefited from soaring proceeds from commodity exports and a sharp drop in imports that helped to more than triple Russia’s current account surplus in the first half of 2022 to $138.5 billion.
But the upward pressure on the rouble could weaken as the Russian central bank is widely expected to cut its key rate from 9.5% at its July 22 board meeting after Russia posted a drop in consumer prices in June.
Russian stock indexes were relatively steady.
The dollar-denominated RTS index was flat at 1,113.6 points. The rouble-based MOEX Russian index was 0.1%lower at 2,061.0 points. (Reporting by Reuters. Editing by Jane Merriman)