MOSCOW: The Russian rouble gave up early gains on Tuesday to head back towards a one-week low against the dollar, waiting for support from upcoming month-end corporate tax payments, while buttressed by capital controls and high interest rates.
The Bank of Russia said its rate hiking cycle may be near completion as it raised its key interest rate by 100 basis points to 16% on Friday, increasing borrowing costs for the fifth consecutive meeting in response to stubborn inflation.
By 1338 GMT the rouble was 0.5% weaker against the dollar at 90.50 and had lost 0.6% to trade at 99.06 versus the euro. It had shed 0.5% against the yuan to 12.66.
Russian rouble falls to near one-week low versus dollar
“The rouble … is for now continuing to consolidate around the 90 mark,” said Alor Broker’s Alexei Antonov, though he expects the rouble to weaken in the near future.
“Very often, after periods of calm, strong movement follows,” he said.
Since October and the rouble’s most recent slide to 100 against the dollar, a presidential decree forcing exporters to convert some foreign currency revenue has provided support.
The rouble should also gain a boost from month-end tax payments, which usually prompt exporters to convert foreign currency revenue to pay local liabilities.
But the rouble can struggle in December as citizens tend to buy foreign currency in advance of Russia’s long New Year holidays in January.
Brent crude oil, a global benchmark for Russia’s main export, was unchanged at $77.93 a barrel.
Russian stock indexes were mixed.
The dollar-denominated RTS index was down 0.3% at 1,072.6 points. The rouble-based MOEX Russian index gained 0.2% to 3,080.3 points.
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