MOSCOW: The rouble weakened on Tuesday, giving up some of the strong gains from the previous two sessions as oil prices slid and as demand for dollars picked up after the central bank discontinued its regular forex market interventions a day earlier.
At 0915 GMT, the rouble was around 1 percent weaker against the dollar at 46.32 and lost 1 percent to trade at 57.46 versus the euro.
The central bank abolished the rouble's floating corridor against a dollar-euro basket on Monday and said it would no longer carry out regular interventions of $350 million a day to support the currency.
Analysts welcomed the move, a long-term policy objective for the bank as part of its shift to an inflation targeting regime, but said it was likely to boost volatility in the rouble in the short term.
"Despite the significant amount of forex sold in the past few weeks, demand for forex liquidity remains," analysts at Bank Zenit said in a note. "For that reason, the rouble retains the potential to weaken in the medium term, but in the next few days volatility could pick up."
The central bank has warned it could still intervene to defend the rouble if risks to financial stability emerge, and President Vladimir Putin said on Monday the bank could punish those speculating against the rouble.
Demand for dollars has soared as a result of Western sanctions over the Ukraine crisis restricting Russian firms' access to international capital markets. The central bank has stepped in to fill the gap, selling some $30 billion in October to plug the gap and prop up the rouble.
A slump in global oil prices over the past few months has added further pressure to Russia's national currency.
On Tuesday, front-month futures for crude benchmark Brent sank below $82 a barrel, near a four-year low, weighed down in part by dollar strength and robust U.S. shale production.
Oil is one of Russia's chief exports, and hence swings in the price of oil have a large impact on Russia's balance of payments and, by extension, the rouble.
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