Russian rouble falls after S&P rating warning

MOSCOW: The Russian rouble fell on Thursday towards its weakest levels since the first half of March, pressured by a warning from Standard & Poor's that new sanctions could trigger a rating downgrade.

S&P said Russia's rating could be cut if there are harsh Western sanctions on all government debt, systemic banks or energy companies. Russia, however, would survive more moderate sanctions that don't target government debt, S&P said.

Russia has investment-grade rating from three major international agencies.

The rouble fell 0.5 percent to 65.57 against the dollar  as of 1433 GMT, moving towards its weakest level since March 12 of 65.85 it last hit on Monday.

U.S. Republican and Democratic senators introduced legislation on Wednesday aimed at deterring Russia from meddling in U.S. elections, threatening sanctions on its banks, energy companies, defence industries and sovereign debt.

"A stronger rouble reaction to the sanctions theme is possible if such legislation will be considered more actively," analysts at Nordea Bank said in a note.

Against the euro, the rouble eased 0.3 percent to 73.54 .

On Wednesday, investors ignored the sanctions threat and snapped up Russia's OFZ treasury bonds at the finance ministry's auctions.

The ministry sold 83 billion roubles ($1.3 billion) worth of bonds, its second-best result so far this year, indicating demand for Russian assets remains strong, given Russia's  investment-grade credit ratings and high yields.

Brent crude oil, a global benchmark for Russia's main export, slid 0.2 percent at $69.15 a barrel but hovered near its 2019 peak of $69.96 hit the day before.

Russian stock indexes were under pressure from globally weaker demand for emerging market assets. The dollar-denominated RTS index was down 0.7 percent at 1,216.3 points, while the rouble-based MOEX Russian index was steady at 2,532.2 points.