MOSCOW: The rouble tumbled to a three-week low on Tuesday, sliding past 58 to the dollar, while shares in aluminium producer Rusal leapt as Russian businessman Vladimir Potanin hinted at a possible merger with mining giant Nornickel.
Investors were looking for clues on when Russia may intervene in the currency market, something Finance Minister Anton Siluanov said Russia could turn to as it tries to keep a lid on the rouble’s strengthening.
The central bank did not immediately respond to a request for comment on what caused the rouble’s sharp drop on Tuesday.
The finance ministry said it did not plan to use extra budget revenues to buy foreign currency or gold, as it eyed increased budget revenues this month thanks to higher oil prices.
Volatile rouble slumps to 10-day low; Gazprom shares extend losses
By 0904 GMT, the rouble was 5.4% weaker against the dollar at 58.18, its weakest point since June 14. The unit had lost 3.5% to trade at 59.77 versus the euro, earlier slipping to a three-week low of 59.95.
The rouble’s recent slump from more than seven-year highs hit last Wednesday is just a correction on the market, said Alor Broker in a note.
“It is too early to talk about a break in the rouble’s strengthening trend,” Alor Broker analysts wrote. “Russia’s balance of payments will continue to remain very strong, importers will not recover their positions quickly.
“Only by introducing a new budget rule can the situation on Moscow Exchange’s currency market change radically.”
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