MOSCOW: The Russian rouble opened weaker on Friday, tracking a decline in oil prices and on expectations the central bank will cut its key policy rate, denting profits of investments in the currency.
At 0720 GMT, the rouble was 0.6 percent weaker against the dollar at 64.71 and had also lost 0.6 percent to trade at 73.19 versus the euro.
The central bank is to announce its rate decision at 1030 GMT, with the market broadly expecting a 50 basis point cut, which would be the first policy easing in nearly a year.
"A reduction in the key rate reduces the attractiveness of the currency and, as a rule, contributes to its weakening," Alexander Grichenkov, an analyst at MFX Broker, wrote in a note, saying the rouble is probably going to weaken further on Friday.
However, ING economist Dmitry Polevoy said in a note that the impact on the rouble from a possible rate cut might be muted as easing had already been priced in.
"Only a further significant softening of (the central bank's) rhetoric, coupled with a cut, may shake the rouble," Polevoy wrote.
"But it is unlikely the central bank will radically change its positions taking into account that key inflation risks are still out there."
He expects the rouble to trade between 64.00-65.00 roubles per dollar.
Brent crude oil, a global benchmark for Russia's main export, was down 0.9 percent at $51.48 a barrel.
Analysts also attribute rouble weakening to a long holiday weekend ahead in Russia. The rouble tends to shed some value before any extended breaks in trading.
Russian share indexes were also lower.
The dollar-denominated RTS index was down 1.4 percent to 937 points, while the rouble-based MICEX was 0.5 percent lower at 1,926 points.
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