Rouble weakens amid stronger demand for foreign currency

MOSCOW: The Russian rouble weakened against the dollar on Friday as demand for foreign currency edged up, with some traders saying that Ukraine’s surprise attack in Russia’s Kursk region was one of the factors.

At 0750 GMT the Russian currency was 0.8% lower at 84.35 to the dollar.

According to an analysis of the over-the-counter market, the rouble was down 0.1% at 11.89 against the yuan, which has become the most traded foreign currency in Moscow.

Russian forces are battling Ukrainian troops for a fourth day after they smashed through the Russian border in the Kursk region in one of the biggest Ukrainian attacks on Russia since the war began in February 2022.

“Perhaps this is a justified reason, for example, for foreign banks remaining in Russia to buy currency,” said a dealer at a large Russian bank. The rouble has been on a weakening streak since the attack began.

The rouble was expected to receive support this week from increased net daily sales of foreign currency by the central bank and the finance ministry that went into effect on Aug. 7.

“Kursk shattered market expectations that interventions would be sufficient to support the rouble,” the trader added.

Trading in major currencies shifted to the over-the-counter market, obscuring pricing data, after Western sanctions on the Moscow Exchange and its clearing agent, the National Clearing Centre, were introduced on July 12.