A reflection of a yearly chart of U.S. dollars and Russian roubles are seen on rouble notes in this photo illustration taken in Warsaw November 7, 2014. REUTERS/Kacper Pempel

May 17 (Reuters) – The Russian rouble weakened on Tuesday, stepping away from near five-year highs against the euro, after the central bank eased some capital controls that were the main driver of its strength in the past few weeks.

The rouble has become the world’s best-performing currency this year despite a full-scale economic crisis, although this is because of artificial support from controls that Russia imposed to shield its financial sector in late February after it sent tens of thousands of troops into Ukraine.

At 0741 GMT, the rouble was 0.7% weaker at 63.89 against the dollar , moving away from the 62.6250 level reached on Friday, its strongest since early February 2020.

Against the euro, the rouble fell 1.1% to 66.50 , hovering near its strongest level since mid-2017 of 64.9425 that it touched last week.

The rouble pared gains after the central bank raised the ceiling for cross-border transactions, allowing Russian residents and non-residents from friendly states to channel foreign currency abroad at an amount equivalent to up to $50,000 a month, from the previous limit of $10,000.

The bank’s decision is unlikely to immediately change the balance of power in the market, where export-focused companies are obliged to convert 80% of their revenues as the central bank can not intervene itself after the West froze about half of its gold and foreign exchange reserves.

But the latest move from the central bank can be seen as an indication that the recent phase of the rouble rally could be over soon, BCS Brokerage said.

On the stock market, the dollar-denominated RTS index (.IRTS) shed 0.2% to 1,171.6 points, while the rouble-based MOEX Russian index (.IMOEX) added 0.5% to 2,377.6 points.

Promsvyazbnk analysts said the MOEX index may climb above 2,400 during the day.

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Reporting by Reuters; Editing by Christian Schmollinger

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