MOSCOW, Feb 2 (Reuters) – The Russian rouble opened firmer on Tuesday, buttressed by rising oil prices, but its gains were limited ahead of a court hearing that could see prominent Kremlin critic Alexei Navalny handed a significant jail term.
The rouble was 0.3% stronger at 75.91 against the dollar as of 0710 GMT and up 0.2% to 91.61 versus the euro ahead of the court hearing.
Russian state prosecutors said they would ask to jail Navalny, a fierce critic of President Vladimir Putin, for up to three and a half years.
Navalny was detained last month on his return from Germany where he was recovering after a suspected poisoning. His detention sparked mass street protests across Russia.
The political unrest is a headache for Putin, 68, who has dominated Russian politics for over two decades. The case has set off new talk of Western sanctions on Russia and raised tensions as U.S. President Joe Biden launches his administration.
The rouble looks undervalued given the fundamental factors but it’s price envisages a geopolitical premium which can pressure the Russian currency, Otkritie bank said.
On the upside, the Russian economy shrank by just 3.1% amid the COVID-19 pandemic in 2020, data showed late on Monday. While the sharpest contraction in 11 years, it was much shallower than predicted by analysts and the Russian government.
Brent crude oil, a global benchmark for Russia’s main export, was up 1.1% at $56.99 a barrel, supporting stock indexes.
The dollar-denominated RTS index was up 1.5% to 1,384.7 points. The rouble-based MOEX Russian index was 1.4% higher at 3,337.8 points.
Reporting by Andrey Ostroukh. Editing by Mark Potter