Russian rouble firms with other emerging currencies ahead of OFZ bond auctions

MOSCOW: The Russian rouble firmed ahead of treasury bond auctions on Wednesday along with other emerging market currencies, but its gains were capped by falling oil prices and geopolitical risks.

Political unrest in Kyrgyzstan, where rival opposition factions made grabs for power on Wednesday, added to turmoil in neighbouring Belarus, a military conflict in the South Caucasus and the suspected poisoning of Kremlin critic Alexei Navalny in exerting pressure on the currency.

At 0746 GMT, the rouble was 0.4pc stronger against the dollar at 78.15 and had gained 0.2pc to trade at 91.88 versus the euro.

Rising coronavirus cases globally and at home also weighed.

Brent crude oil, a global benchmark for Russia's main export, was down 1.2pc at $42.12 a barrel.

Rouble sales would be facilitated by the situation on energy markets, said Bogdan Zvarich, chief analyst at Promsvyazbank.

However, he said the dynamics of emerging market currencies, which were gaining against the dollar, would provide some support.

The Kyrgyz som was steady at 79.62 against the dollar amid political unrest, which saw the prime minister quit and a parliamentary election annulled.

Belarus, mired in upheaval over a disputed Aug. 9 election, saw its gold and foreign exchange reserves fall to $7.32 billion in September from $7.46 billion a month earlier, the central bank said on Wednesday.

The Belarusian rouble remained under pressure at 3.08 against the euro.

It firmed slightly against the dollar to 2.62, not far from its record low of 2.6640 hit in late August.

Weekly auctions of the finance ministry's OFZ bonds are in focus.

Demand for these bonds serves as a gauge of global market sentiment towards Russian assets Russian stock indexes were falling.

The dollar-denominated RTS index was down 0.8pc to 1,159.8 points.

The rouble-based MOEX Russian index was 0.5pc lower at 2,877.7 points.

Shares in Russian shipping company Sovcomflot slid on their long-awaited debut in Moscow, underperforming the wider index.