Rouble weakens beyond 70 per dollar before rate decision this week
(Adds detail, updates prices)
MOSCOW, Sept 10 (Reuters) - The Russian rouble weakened
beyond 70 versus the dollar for the first time since mid-March
2016 on Monday, remaining under pressure from the possibility of
more U.S. sanctions.
The rouble hit 70.51 in afternoon trade on the Moscow
Exchange, taking its year-to-date losses close to 19 percent.
U.S. Senate hearings on Wednesday on sanctions against
Russia, and an interest rate decision by the Russian central
bank on Friday will be the main events this week, said Rosbank,
a subsidiary of Societe Generale.
As of 1502 GMT, the rouble was 0.7 percent weaker at 70.40
versus the dollar and had shed 1.1 percent to
trade at 81.68 against the euro.
The threat of sanctions has overshadowed Russian financial
markets since early August as new penalties might be applied to
holdings of Russian state debt. Concerns about the Russian-U.S.
dispute over the Syrian conflict have also weighed.
Domestic politics are also a factor. Over the weekend,
police detained around 1,000 people protesting against planned
increases in the pension age, disrupting demonstrations against
an unpopular change that has hurt President Vladimir Putin's
"I imagine that pictures of school kids beings rounded up in
Moscow by police over the weekend, and on-going concerns over
on-going Russian escalation in Syria (Idlib) will not have
played very well with the U.S. Congress which is still mulling
over new Russians sanctions iterations," said Tim Ash, a
strategist at BlueBay Asset Management.
The central bank is seen holding the main rate at 7.25
percent this week as the weaker rouble, hit by the sanctions
factor and a sell-off in other emerging markets, is set to
filter into consumer prices and once again boost inflation,
which the central bank has just recently managed to rein in.
Senior Russian officials are keeping up verbal pressure on
the central bank, which is not available for comment as it
observes a week of silence before rate decisions.
Kremlin economic aide Andrei Belousov said on Monday a
possible rate increase would be "highly undesirable" after Prime
Minister Dmitry Medvedev said late last week that lending rates
in Russia should be lower.
The central bank is independent, and markets and investors
regard Governor Elvira Nabiullina as a stable hand on the
For Russian equities guide see
For Russian treasury bonds see
(Reporting by Andrey Ostroukh; Editing by David Stamp)
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