MOSCOW: The Russian rouble hit a record low against the dollar on Thursday, dragged down by new European Union sanctions against Russia and by sliding oil prices.
At 1300 GMT the rouble was at 37.58 against the dollar, down 0.7 percent on the day and below the rouble's previous historic low of 37.51 reached on Sept. 1.
The rouble was down over 1 percent to 48.65 against the euro , and down 0.9 percent to 42.55 against the dollar-euro basket.
It remains stronger than its record low against the euro of 51.20 as well as its all-time low of 43.21 against the basket, both reached on March 3.
The rouble has been weighed down by confirmation that the European Union will introduce a new wave of sanctions to punish Russia for its policy in Ukraine, notwithstanding last week's ceasefire between Ukraine and separatist rebels.
European Council President Herman Van Rompuy said on Thursday that the EU's new sanctions would come into effect on Friday, but added that they could be suspended or amended following a review of the Ukraine ceasefire planned for the end of September.
Earlier, a spokesman for British Prime Minister David Cameron said that European leaders had spoken on Thursday and agreed to impose the sanctions by the end of the week.
The measures are expected to restrict lending to major Russian oil companies and European technology exports, as well as impose more visa bans and asset freezes on Russian officials.
Russia has said it may retaliate by banning more European imports such as used cars and textile goods.
Thursday's announcements lay to rest lingering doubts about whether the sanctions would be imposed. The EU has delayed a decision twice this week, fuelling speculation that it could have a change of heart because of the ceasefire.
"The whole talk of sanctions against Russia is yet to produce a clear understanding whether the new measures will be announced or not," Igor Golubev, an analyst at Promsvyazbank in Moscow, wrote in a morning note before the latest remarks from London and Brussels.
The rouble has also been losing ground because of plunging oil prices. Brent fell below $97 per barrel on Thursday, a new 17-month low.
"The market focus is shifting from sanctions to the oil price," said Dmitry Polevoy, chief Russia economist at ING.
"Oil has lost $4-5 over the last several days, so just to compensate for the effect of oil (falling) the rouble should maybe adjust to 38-38.50, purely from this oil-related logic."
He said that the rouble may see a rally later in the month, as oil exporters need to buy local currency to pay monthly taxes in two weeks' time.
Russian shares also saw sizeable falls. The dollar-denominated RTS index was down 1.8 percent at 1,217 points, while the rouble-based MICEX was down 1.2 percent at 1,450 points.
The stock performance wasn't helped by the publication of disappointing financial results by Gazprom, Russia's largest stock by market capitalisation.
Gazprom's share price was down 1.4 percent, broadly in line with the market hit by the EU sanctions decision.
Shares in the gas producer had slightly underperformed the market in the morning, after first-quarter results showed net profit missing forecasts on cheaper prices for exports to Ukraine and a weaker rouble.
Gazprom, whose shares had hit a six-week high earlier this week, reported a 41 percent fall in first-quarter net profit to 223 billion roubles ($6 billion). The gas giant also said it had written off 71.3 billion roubles ($1.9 billion) owed by Ukraine.
Nord-Kapital analyst Roman Tkachuk said in a note that despite the disappointing results "the market practically didn't react to it".
Gazprom's results for the second and third quarters, after the Ukraine crisis intensified, will be of greater interest, he added.
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