Rouble hits 71 vs dollar as oil price falls, vote on constitution nears end

MOSCOW: The rouble eased to a one-month low on Tuesday under pressure from falling oil prices, while the finance ministry tested investor sentiment for government bonds ahead of a public holiday.

The market will be closed on Wednesday, the last day for Russians to vote on changes that could allow President Vladimir Putin to stay in the Kremlin until 2036 if re-elected. Critics say the move is a constitutional coup. Voting began earlier in June.

At 1130 GMT, the rouble was 1.4% weaker against a broadly stronger dollar at 70.95 after touching 71.04, its weakest since late May.

Versus the euro, the rouble lost 1% to trade at 79.50 .

"It would be logical to trim positions in the rouble and stocks ahead of tomorrow's holiday," Alor Brokerage wrote.

VTB Capital noted that the rouble was ending June almost flat against the dollar for the month, in line with other emerging market currencies.

Tuesday's two OFZ bond auctions by the Finance Ministry were in focus after the central bank slashed rates to record lows this month and hinted they could go even lower.

The ministry sold 11.4 billion roubles ($160.65 million) worth of five-year OFZ bonds at the first auction, drawing demand of 20.4 billion roubles.

Lower rates drive down bond yields, which move inversely to price. Demand for OFZ bonds is seen as a gauge of investor sentiment towards Russian assets. Foreign investors hold about 30% of OFZ bonds.

Russian equity indexes came under pressure from global sentiment with the dollar-denominated RTS down 1% at 1,227.3 points and the rouble-based MOEX Russian index 0.2% lower at 2,763.6 points.