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Russian Ruble, Stocks Soar Higher After Economy Minister Arrest

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Markets and currency in Russia saw gains on Tuesday following the arrest of Economic Development Minister Aleksey Ulyukayev for bribery. He is the highest-ranking Kremlin official arrested since the collapse of the Soviet Union.

The ruble was gaining about one percent trading at 65.84 against the US dollar, and 70.57 against the euro.

<figcaption>Graffiti in support of the ruble on the wall of a building in St Petersburg. © Igor Russak / Sputnik</figcaption>
Graffiti in support of the ruble on the wall of a building in St Petersburg. © Igor Russak / Sputnik

The dollar-traded RTS index was up 1.5 percent, and the ruble-denominated MICEX was trading flat to positive.

Ulyukayev was arrested on Tuesday after being accused of taking a $2 million bribe to green light oil major Rosneft's takeover of smaller rival Bashneft. Both oil companies are state-owned, and the privatization of Bashneft filled a budget hole, due to lower earnings from energy resources.

In July, Ulyukayev opposed the deal, saying state-owned company Rosneft should not participate in the takeover. Apparently, he changed his mind by October, when the $5.3 billion deal was sealed.

There were other reasons behind the ruble growth on Tuesday.

Oil prices recovered with Brent gaining 73 cents, trading at $45.16 per barrel on renewed hopes of an OPEC production cut. The price of the Russian oil benchmark the Urals blend is pegged to Brent quotes.

On top of that, Russian President Vladimir Putin spoke by telephone to US President-elect Donald Trump. According to the Kremlin, the two leaders agreed the current economic ties between the countries are at the worst level since the Cold War and needed to improve.

“During the conversation, Putin and Trump not only acknowledged current US-Russia relations as highly unsatisfactory, but also called for joint work to normalize ties toward constructive cooperation on a wide range of issues,” said a Kremlin statement.

Trump told Putin that he’s “very much looking forward to having a strong and enduring relationship with Russia and the people of Russia.”

Source: RT
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