MOSCOW: The Russian rouble gave up early gains on Tuesday after the Economy Ministry said it expects a recession next year and sees the currency remaining weak.
At 1015 GMT, the rouble was down 1.7 percent against the dollar at 52.08, after rising as much as 1 percent on the day earlier in the session. It was trading 1.3 percent weaker against the euro at 64.76.
Crude gave up some of its gains from late Monday but remained above the multi-year lows reached earlier. That lifted the rouble in early trade after it suffered its biggest intraday losses in 16 years in the previous session.
But the Economy Ministry said that lower oil prices and sanctions imposed on Moscow over its role in the Ukraine conflict will cause gross domestic product to contract by 0.8 percent next year, a significant change from an earlier forecast of 1.2 percent growth.
The ministry also cut its forecast for 2015's average oil prices by $20 to $80 and said it expected an average rouble rate of 49 to the dollar.
"The revision of the economic outlook had been expected, but for some it still could have been an unpleasant surprise that had forced foreign currency purchases or closure of short positions," said a dealer at a major Russian bank.
The rouble closed its previous session down 1.6 percent, probably supported by interventions from the central bank, traders said. But earlier in the session on Monday, it had traded as much as 7 percent lower against the dollar.
"In case of a further fall in energy prices the dollar is poised to firm to at least 55 roubles and the euro-rouble rate should reach 68-70 roubles," Gleb Zadoya, head analyst at Profit investment house, wrote in a note.
Russian stock indexes were little changed. The rouble-based MICEX was up 0.4 percent at 1,585 points and the dollar-based RTS was up 0.1 percent to 961 points.
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