MOSCOW: Russia's rouble fell on Wednesday as markets factored in falling oil prices and a stronger dollar, while support waned from firms converting foreign currency to pay their tax bills at the end of the month. At 1615 GMT, the rouble was 1.7 percent weaker against the dollar at 51.80 and down 1.7 percent to 56.36 versus the euro.
InstaForex analyst Anton Fomin said in a note that the external backdrop was negative: oil benchmark Brent has fallen below $65 per barrel, concern about the Greek debt crisis is weighing on risk appetite, and signals that the US Federal Reserve will raise interest rates are boosting the dollar. Brent fell a further 1.4 percent to below $63 per barrel on Wednesday, after sliding 2.5 percent on Tuesday.
"The main cause of this (rouble) dynamic is oil, which demonstrated a serious fall yesterday," said BCS analyst Ivan Kopeikin in a note, predicting that the rouble would probably breach 53 roubles per dollar in the near future. Alfa Bank trader Igor Akinshin said heavy demand for the dollar "is basically a general tendency for all markets. Plus, one can say that a (downward) correction of the rouble has been expected for a long time".
Forex Club analyst Alena Afanasieva said in a note that the rouble's decline to a two-month minimum "may be a signal for the market that the Russian currency's period of firming has come to an end".
She said the rouble was also being weighed down by the impending end of the monthly tax period requiring conversion of hard currency into roubles, and by the actions of the central bank, which has been purchasing $200 million in forex daily.
Analysts at Sberbank CIB said the market was now wondering when these daily interventions would end. "If the CBR continues intervening, a further USD/RUB rise becomes almost inevitable," they wrote.
"However, the question of where this trend could stop will likely be in focus." Russian stock indexes were mixed, reflecting the differing impact of the weaker rouble on share prices in rouble and dollar terms.
The dollar-denominated RTS index closed down 1.3 percent at 1,012 points but the rouble-based MICEX rose 0.6 percent to 1,641 points.
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