Russian rouble down as oil prices drop, FX buying increases

MOSCOW: The Russian rouble weakened on Wednesday as oil prices fell and forex purchases for state reserves grew.

At 0805 GMT, the rouble was 0.15 percent weaker against the dollar at 65.85 and had lost 0.1 percent to trade at 74.40 versus the euro.

Oil prices slipped as bullish output forecasts by two big U.S. producers and a buildup in weekly U.S. crude stockpiles outweighed OPEC-led production cuts.

Brent crude oil, a global benchmark for Russia's main export, was down 0.71 percent at $65.39 a barrel.

The rouble also felt pressure from a finance ministry announcement that, in response to a rise in oil prices in past weeks, it would increase its purchases of forex to bolster state reserves between March 7 and April 4.

The ministry said it would buy 15.5 billion roubles worth of forex per day, up from 9.7 billion roubles per day over the previous period.

However, Mikhail Poddubsky, an analyst with Promsvyazbank, said in a note he didn't see a great risk for the rouble from the increase in forex purchases, because the current account in March was still strong.

Markets were awaiting two auctions of Russian government bonds, known as OFZ, later in the day.

Russian stock indexes were up.

The dollar-denominated RTS index was up 0.5 percent to 1,186.16 points. The rouble-based MOEX Russian index was 0.53 percent higher at 2,479.31 points.