Easing capital outflows behind rouble's climb to near 5-month high -Kremlin aide

MOSCOW, Nov 22 (Reuters) - Lower capital outflows and a stabilising balance of payments have helped the rouble to recover, Russian President Vladimir Putin's economic adviser said on Wednesday, as the currency traded near its strongest to the dollar since late June.

The rouble has rebounded since last month's presidential decree requiring some exporters to convert a significant portion of foreign exchange revenue, recording six successive weeks of growth to firm from beyond 100 to the dollar to below 90 now.

Kremlin aide Maxim Oreshkin, whose verbal interventions criticising the central bank's soft monetary policy in August were swiftly followed by an emergency 350-basis-point rate hike, said the rouble would likely settle near current levels, depending on the tug-of-war between a continued reduction in capital outflows and rising domestic demand.

"The rouble is strengthening now and may strengthen further," Oreshkin said in an interview with the Moskovsky Komsomolets newspaper. "But in general one should not expect any fundamental deviations of the rouble rate from current equilibrium values."

Oreshkin said the rouble had weakened due to lower oil and gas prices this year, while recovering consumer demand and investment had increased demand for imports.

Capital flight has also played a role, he said, pointing to exporters paying foreign debts, the need to increase financing for buyers of Russian products abroad and the purchase of stakes in foreign companies by Russian investors as Western firms have departed the country.

"All this together increased demand for foreign currency and led to the rouble's weakening," Oreshkin said. "Now we see that these temporary capital outflows are starting to diminish."

Oreshkin did not draw a link between Putin's imposition of capital controls and the reduction in capital outflows, nor did he mention interest rates in the interview.

In August, he had identified soft monetary policy as the main source of rouble weakening and accelerating inflation. The central bank has hiked rates by 650 basis points since his intervention.

Dmitry Polevoy, head of investment at Locko-Invest, said foreign trade dynamics were now helping the rouble.

"Just as the rouble's weakening in 2023 was mainly due to the worsening parameters of external trade, its current appreciation reflects their improvement," Polevoy said. (Reporting by Reuters Writing by Alexander Marrow Editing by Gareth Jones)