MOSCOW: The rouble weakened on Thursday, reversing strong morning gains, as a keynote state-of-the-nation speech by Russian President Vladimir Putin left investors unimpressed by promised reforms.
At 1025 GMT, the rouble was 0.3 percent weaker on the day at 53.37 versus the dollar and 0.1 percent weaker at 65.71 against the euro.
The rouble had been up around 1.1 percent against both currencies at 0900 GMT, but fell sharply into negative territory after Putin began his speech with harsh rhetoric repeating his long-standing criticisms of Western policy towards Ukraine, and defended Russia's actions towards its neighbour.
The rouble saw a weak rally when the Russian President began elaborating pro-business reforms, including an amnesty on capital returning to Russia, a freeze on higher taxes, and an easing of regulations for small businesses.
Putin also called for "harsh" measures against currency speculators, without elaborating.
However, the Russian currency was back in negative territory by the end of the speech, which left markets unimpressed either by steps to resolve the confrontation over Ukraine, or by domestic economic reforms.
"Net-net, not seeing any new big ideas in this speech which are going to help the Russian economy, or ease market pressure on Russian assets. This is old school, Cold War stuff," Standard Bank analyst Tim Ash said in a note.
The rouble had seen strong gains in the morning, when the central bank published a statement that reiterated its readiness to intervene in the market to defend the currency, and slashed its interest rate on foreign currency repo loans designed to address forex shortages.
The bank has resumed interventions this week, with $700 million in forex sales on Monday. Traders said the bank had intervened by a similar amount on Wednesday. The bank releases data on interventions with a two-day delay.
Russian stock indexes also fell back during Putin's speech, but remained in positive territory, helped by rising global stock markets.
At 1025 GMT the dollar-based RTS index was up 0.3 percent to 951 points, while the rouble-based MICEX index was up 0.3 percent to 1,611 points.
The RTS had been up 2 percent on the day, and MICEX up 0.7 percent, when Putin's speech began.
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