Thursday, September 29

Russian rouble eases to 60 vs dollar as cenbank cuts rates

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MOSCOW — The Russian rouble weakened slightly on Friday, hovering near the key 60 mark against the dollar, as the central bank lowered its benchmark interest rate to 7.5% and forecast annual inflation for 2022 at 11-13%.

By 1057 GMT, the rouble was 0.4% weaker against the dollar at 60.01 and eased 0.2% to trade at 59.88 against the euro.

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The central bank cut its key interest rate by 50 basis points on Friday, in line with a Reuters poll this week, as inflation slows and the economy needs cheaper lending to limit a slump, but did not repeat recent guidance that it would study the need for further cuts.

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It was the fifth cut at a scheduled meeting this year and the sixth overall, following an emergency hike to 20% days after Russia sent tens of thousands of troops into Ukraine on Feb. 24.

Almost all analysts polled expected the 50-basis-point cut, but some had cautioned that higher inflationary expectations among Russian households may limit the room for monetary easing.

“The impression from the central bank’s statement is that the regulator is in no hurry to cut and, in my view, most of the press release is devoted to inflationary risks precisely in order to contain market expectations of a rate cut,” said Alfa Bank’s chief economist Natalia Orlova.

Geopolitics is also in focus as Russian President Vladimir Putin and Chinese leader Xi Jinping are set to address fellow leaders at a summit in Uzbekistan on Friday.

On the stock market, the dollar-denominated RTS index slid 0.1% to 1,286.7 points. The rouble-based MOEX Russian index was 0.2% higher at 2,451.2 points.

The MOEX index remains in the mid-term growing trend, but in the short term “it is stuck in a relatively narrow band. To continue growth, the index needs to break through the 2,480–2,500 range,” BCS Global Markets said in a note.

For Russian equities guide see

For Russian treasury bonds see

(Reporting by Andrey Ostroukh and Alexander Marrow; Editing by Sherry Jacob-Phillips, Kirsten Donovan)

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