Mon 07 August 2023:
The Russian rouble slid to a more than 16-month low past 96 to the dollar early on Monday, hurt by strong local demand for foreign currency and typically lower support from exporters at the start of the month.
The rouble was extending losses after dropping more than 4% against the dollar and euro to record one of its worst weeks all year. Russian authorities say lower export revenues and rebounding imports are the primary cause of rouble weakening.
At 0729 GMT, the rouble was 0.3% weaker against the dollar at 96.01, earlier hitting 96.3675, its weakest point since March 28, 2022.
It had gained 0.1% to trade at 105.53 versus the euro , having fallen to a more than 16-month low past 106 on Friday. It was unchanged at 13.33 against the yuan .
The rouble tends to weaken early each month after losing support of a month-end tax period that usually sees exporting firms convert foreign exchange (FX) revenues to meet local liabilities.
Market players have also attributed the rouble’s jitters to Western companies’ exits from Russia, which can require large FX purchases and foster currency market volatility.
Demand for foreign currency should subside, said Alor Broker’s Alexey Antonov in a note, as importers could lose confidence in their ability sell at higher rouble prices.
“However, buying the rouble against the dollar is still frightening,” Antonov said. “Any negative could provoke a little panic on the FX market with the (dollar-rouble) currency pair going above 100.”
Brent crude oil, a global benchmark for Russia’s main export, was up 0.1% at $86.16 a barrel.
Russian stock indexes were higher, recovering ground after a sharp slide in the previous session.
The dollar-denominated RTS index was up 1% to 1,025.9 points. The rouble-based MOEX Russian index was 1.1% higher at 3,125.0 points.
-Reuters
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