May 11 Reuters The Russian rouble pared early losses and surged past 68 against the U.S. dollar on Wednesday, boosted by capital controls, while stocks were mixed after a long weekend.

The rouble has been volatile for weeks in thin trade in Moscow, propped up by capital controls but pressured by concerns about more sanctions being imposed on Moscow over what it calls a special military operation in Ukraine.

At 1034 GMT, the rouble was up 2.5 to 67.64 against the dollar on the Moscow Exchange , not far from last week39;s high of 65.31 its strongest level since March 2020.

Exporters are likely to beef up FX sales starting today, as they need roubles to pay taxes in two weeks. Also, they will be selling FX revenues accumulated over the long weekend, Sberbank CIB said in a note, explaining gains in the rouble.

Against the euro, the rouble jumped 2.6 to 71.47 , around levels where it used to trade before the COVID19 pandemic hit in 2020.

The rouble is currently being supported by the mandatory conversion of foreign currency by exporters and restrictions on capital outflows, while demand for FX from importers remains weak. Without the emergency measures imposed by the central bank the rouble would have been weaker.

The Russian rouble39;s fortunes are increasingly disconnected from the health of the Russian economy as international sanctions tighten, ratings agency Scope said in a note.

Further rouble appreciation could pose risks for the budget, analysts say….