The Russian rouble firmed past 56 against the dollar on Wednesday for the first time since 2018, and touched a seven-year high against the euro as export-focused companies sold foreign currency to pay taxes and traders shrugged off the expiry of a key debt payment licence.
The United States said on Tuesday it would not extend a key waiver, which expired on Wednesday, that had allowed Russia to pay US bondholders. The decision could push Moscow closer to the brink of default as Washington ramps up pressure on the country over its actions in Ukraine.
Rouble traders looked past that for now as the currency extended gains.
The Russian currency has firmed about 30% against the dollar this year despite a full-scale economic crisis in Russia, making it the world's best-performing currency.
It is steered by capital controls imposed in late February to shield Russia's financial sector after Moscow's decision to send tens of thousands of troops into Ukraine prompted unprecedented Western sanctions.
At 0840 GMT, the rouble was 1.2% stronger against the dollar at 56.10, earlier touching 55.80, its strongest mark since February 2018.
The Russian rouble is receiving support from a month-end tax period, new gas payment terms requiring conversion of foreign currency into roubles, import cuts and currency restrictions, Veles Capital said in a note.
The currency's strength has raised concerns about the negative impact on Russia's budget revenue from exports. On Monday, Russia cut the proportion of foreign currency revenue that exporters must convert into roubles to 50% from 80%.
The central bank on Wednesday said it would hold an extraordinary rate-setting meeting on Thursday, with analysts expecting further monetary easing after two 300-basis-point cuts to 14% following an emergency hike to 20% in late February.
Faced with rapidly slowing weekly inflation, the central bank has decided not to wait for its next meeting on June 10, said Promsvyazbank analysts, adding that the key rate may be lowered to 10-12%.
Russian stock indexes climbed.
The dollar-denominated RTS index was up 1.4% to 1,291.4 points. The rouble-based MOEX Russian index was 0.3% higher at 2,299.5 points.