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Rouble weakens past 96 vs dollar as rate decision looms

Published 13/09/2023, 06:49 pm
© Reuters. FILE PHOTO: A view shows a Russian one rouble coin in front of a screen in this illustration picture taken August 22, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo
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By Alexander Marrow

(Reuters) -The rouble weakened on Wednesday, heading back past 96 to the dollar and well away from the near six-week high hit in the previous session, as investors digested Kremlin comments on the currency and awaited Friday's central bank rate decision.

By 1510 GMT, the rouble was 1.2% weaker against the dollar at 96.09. On Tuesday it had reached 92.4450, its strongest point since Aug. 2.

It had lost 1.1% to trade at 103.13 versus the euro and shed 1.6% against the yuan to 13.19 .

The rouble halted its sharp strengthening after comments on the rouble's current position and prospects from President Vladimir Putin and his economic aide Maxim (NASDAQ:MXIM) Oreshkin.

Putin told an economic forum in Russia's far east on Tuesday that exporters' "restrained" return of foreign currency was putting the rouble under pressure, but promised no sudden moves, such as a return to capital controls, to limit rouble volatility for now.

However, the head of Russia's largest lender Sberbank, German Gref, said the authorities were not doing enough to stabilise the rouble, whose weakening this year he put down to a sharp increase in imports and the outflow of capital.

"At the moment the rouble is unjustifiably undervalued," Gref said in an interview with state television. "A fair exchange rate would be at the level of 80-85 roubles (per dollar)."

"And that's why they are actively working to understand, firstly, the reasons, and secondly, to find mechanisms to solve this problem."

The rouble tumbled past 100 to the dollar last month, prompting the central bank to raise interest rates by 350 basis points to 12% on Aug. 15 in an emergency meeting.

Most economists polled by Reuters expect another hike at the regulator's next scheduled meeting on Friday, but top bankers are leaning towards a hold, a development which also slowed rouble strengthening.

The central bank on Wednesday published data showing that companies' price expectations for the three months ahead have risen in September, compared to August.

Late on Tuesday, the economy ministry updated its macroeconomic forecasts, envisaging higher inflation and a weaker rouble over the coming years, as the costs of Russia fighting the war in Ukraine mount.

Brent crude oil, a global benchmark for Russia's main export, was up 0.4% at $92.43 a barrel. Russian stocks were lower.

© Reuters. FILE PHOTO: A view shows a Russian one rouble coin in front of a screen in this illustration picture taken August 22, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo

The finance ministry sold 73 billion roubles ($766.4 million) at one OFZ treasury bond auction on Wednesday, having cancelled last week's auctions.

($1 = 95.2500 roubles)

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