Russian rouble jumps to 2-week high vs dollar, euro By Reuters

(Reuters) -The Russian rouble jumped to a two-week high on Thursday, gaining as much as 3% against the dollar and euro on the Moscow Exchange, supported by capital controls and high oil prices.

By 1121 GMT, the rouble was 2.5% stronger against the dollar at 57.95 , earlier clipping its strongest point since May 25 of 57.4075.

It had gained 3.4% to trade at 61.42 versus the euro , a two-week high.

The rouble has become the world’s best-performing currency this year as it has been steered by capital controls for more than three months since Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

, a global benchmark for Russia’s main export, was up 0.1% at $123.7 a barrel, after surging higher in the previous session.

Rising oil prices are pulling the rouble higher, said SberCIB Investment Research in a note.

The rouble showed little reaction to Russia’s decision to relax some capital controls this week, including an increased ceiling for cross-border transactions for individuals and the move to allow export-focused companies to transfer forex to their overseas accounts under certain conditions.

The central bank is now in focus as it will hold a rate-setting meeting on Friday. A rate cut could put some downside pressure on the rouble and support prices of OFZ treasury bonds.

A majority of analysts polled by Reuters expect a 100-basis-point rate cut to 10% as the bank tries to make lending more affordable amid sluggish consumer demand and a pause in inflation.

But a sharper cut to 9% was also possible as economic prospects and inflation easing give the central bank more room to manoeuvre, BCS Global Markets said.

Consumer inflation in Russia slowed to 17.10% in year-on-year terms in May from 17.83% in April, which was its highest level since January 2002, data showed on Wednesday.

Russian stock indexes were mixed.

The dollar-denominated RTS index gained 0.9% to 1,242.2 points. The rouble-based MOEX Russian index shed 1.4% to 2,285.9 points.

($1 = 59.2000 roubles)