The Russian currency strengthened on Monday, trading at a nine-month high of 63.10 to the US dollar and 69.64 to the euro on the Moscow Stock Exchange.
Analysts link the ruble growth to dividend payouts and the tax season, as well as nervous emerging market investors shifting their money from Turkey after this weekend's attempted coup.
Overall, the Russian currency has gained 17 percent this year, the most in emerging markets after Brazil’s real. The ruble exchange rate, which was traditionally tied to the oil price, was performing better than crude which traded at $47.71 per barrel Monday.
The head of the monetary and financial department of Citibank’s local branch Denis Korshilov explained the ruble’s rally by the peak tax season in Russia. Companies are now paying dividends and converting funds into rubles, thus strengthening the currency, he told business daily Vedomosti. The Russian tax period started on Friday and will peak on July 25.
“Taxes and dividend payments will remain key drivers for the ruble this week,” Alexey Egorov, an analyst at Moscow-based Promsvyazbank told Bloomberg. “Some investors may switch their investments from Turkey into Russian assets amid uncertainty in Turkey after the failed coup attempt."
READ MORE: Turkish currency rebounds after failed coup
According to Egorov, the ruble’s gains mean it’s catching up with its fair value relative to oil. He added the currency should trade as strong as 62 to the dollar based on the current price of crude.
Some experts say Friday night’s coup attempt in Turkey, which pushed investors to buy into safe havens, has also helped the ruble shrug off a slump in crude prices in the last two weeks. Others claim the political crisis in Turkey where army officers tried to take control of the country, didn’t have any effect on the Russian financial market.
"Even though the attempt of a military coup in Turkey has failed it could push the country's economy into a protracted crisis. However, for the global economy in general, the incident is of little threat,” an analyst from Rossiysky Capital bank Anastacia Sosnova was cited by finam.ru
The Turkish lira plunged almost five percent on Friday during the attempted military overthrow of Erdogan's government. The lira reached its lowest level since the 2008 global financial crisis.