Rouble eases with other EM currencies, sanctions back in focus

MOSCOW: The Russian rouble weakened on Monday, tracing moves in other emerging market currencies, while sanctions against Russia came back into focus, putting pressure on companies owned by Russian oligarch Oleg Deripaska.

At 0801 GMT, the rouble was 0.4 percent weaker against the dollar at 67.13 and had also shed 0.4 percent to 77.04 versus the euro.

The rouble remained under pressure ahead of the central bank's resumption of daily buying of foreign currency for state reserves from Jan. 15. Such purchases limit the room for the rouble's strengthening and their size increases along with gains in prices for oil, Russia's key exports.

"Despite the looming re-start of FX purchases, it is still our view that risks for the rouble look balanced," analysts at VTB Capital said in a note.

"In the coming several days, the rouble is likely to start receiving support from a tax period, which will probably help offset headwinds from FX purchases."

Russian export-focused companies usually convert their dollar and euro revenues to meet local tax payments that start in the second half of every month.

On the stock market side, shares in Rusal, an aluminium giant controlled by Deripaska, fell around 2 percent at the market opening.

The move came after U.S. Senate Democratic leader Chuck Schumer said on Saturday he would force a vote soon on a resolution to disapprove the Trump administration's decision to relax sanctions on three Russian companies connected to Deripaska.

Rusal shares later pared some losses and were down 0.9 percent on the day as of 0801 GMT, in line with the broader market. Shares in carmaker GAZ, also controlled by Deripaska, were down 1.0 percent.

The rouble-based MOEX Russian index was 0.7 percent lower at 2,426.4 points, while the dollar-denominated RTS index  was down 0.9 percent to 1,138.8 points.

"Earnings season kicks off today and investors will be looking for signs of slowdown from the impact of the trade dispute between the U.S. and China," Alfa Bank said in a note to clients.

"Sanctions are also back on the radar in Russia."