Russian rouble firms ahead of c.bank meeting

Madiha Shakeel July 26, 2019

MOSCOW: The Russian rouble firmed on Friday ahead of Russia’s central bank meeting, at which the market expects the key interest rate to be cut by 25 basis points.

At 0730 GMT, the rouble was 0.2% stronger against the dollar at 63.12 and had gained 0.2% to trade at 70.31 versus the euro.

It is highly likely that the regulator will cut the key rate by 25 basis points and will indicate the possibility of further easing as inflation decreases, Freedom Finance wrote.

Central Bank Governor Elvira Nabiullina said earlier the bank would prefer to cut rates in small steps as it aims to complete its monetary easing cycle by mid-2020. Still, she did not rule out a 50 basis points rate cut.

“The weak economic growth and the favourable conditions at the foreign markets still form the principal suppositions for the key rate to be cut,” Veles Capital analyst Yury Kravchenko said.

In the short term, the dollar/rouble is expected to consolidate at slightly above 63 roubles per dollar, said Mikhail Poddubsky, an analyst at Promsvyazbank.

The euro was under pressure after the European Central Bank meeting on Thursday, as officials now see September cut as certain.

The Russian currency retains support from the oil prices that edged higher on Friday on worries about Middle East tensions.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.15% at $63.48 a barrel.

The dollar-denominated RTS index was up 0.2% to 1,350 points. The rouble-based MOEX Russian index was 0.1% higher at 2,704 points.

Shares in Gazprom, Russia’s top gas producer, were up 1.2% in early trade after the company decided to sell its 3% of its own shares held in treasury on Thursday.

Copyright Reuters, 2019

  • Leave a Reply

    Your email address will not be published. Required fields are marked *





    Close