Russian rouble holds near nine-month lows

Monitoring Desk

MOSCOW: The Russian rouble opened on a steady footing in early trading in Moscow on Monday, hovering close to a nine-month low against the US dollar following volatile trade for the under-pressure currency last week.

At 0700 GMT, the rouble was flat against the dollar at 73.35 and had gained 0.1% against the euro to trade at 78.39.

The rouble was 0.2% stronger against the Chinese yuan at 10.73, as the Russian government sells 8.9 billion roubles ($121.83 million) of foreign currency per day to plug a budget deficit which has shot up at the start of the year on lower oil and gas revenues.

Russia’s central bank on Friday held interest rates at 7.5%, but signalled it was preparing to hike rates in the coming months and expressed concern over the government’s widening gap between its spending commitments and incoming tax revenues.

At the end of last week the rouble slid through 73 versus the dollar for the first time since last April and analysts said the currency will remain under pressure until exporters begin converting their foreign currency earnings into roubles to meet local tax liabilities due at the end of the month.

Falling energy prices also weighed on the currency. Brent crude oil, a global benchmark for Russia’s main export, was down 1% at $85.53 a barrel, though Russia’s Urals blend sells at a significant discount.

The central bank on Friday cut its forecast for the average Urals price for the rest of this year from $70 to $55 a barrel.

Russian stock markets were up at the start of the session.

The dollar-denominated RTS index rose 0.2% to 973.9 points, while the rouble-based MOEX Russian index was 0.3% higher at 2,268.3 points.