Russian rouble steadies as finance ministry cuts FX sales

The Russian rouble was flat on Tuesday amid low local market activity before a holiday, as the finance ministry reduced foreign currency sales in a move that could add slight downward pressure on the currency. The rouble-based MOEX Russian index was 0.4% lower at 2,284.9 points, pulling away from the near six-month high touched in the previous session.

The Russian rouble was flat on Tuesday amid low local market activity before a holiday, as the finance ministry reduced foreign currency sales in a move that could add slight downward pressure on the currency. At 0751 GMT, the rouble was flat against the dollar at 75.43 and had lost 0.2% to trade at 80.62 versus the euro. It had shed 0.1% against the yuan to 10.87 .

The Russian market will be closed on Wednesday for International Women's Day. "It seems that the dollar-rouble pair is looking for an equilibrium level near the 75 mark," said Alor Broker analyst Alexei Antonov. "So far there are no reasons for strong movement of the rouble."

From Tuesday, the finance ministry is decreasing its daily FX sales to 5.4 billion roubles ($71.6 million) for the upcoming month, down from 8.9 billion roubles. Russia is selling yuan rather than the currencies of what it terms "unfriendly" Western countries, underscoring the growing importance of the Chinese currency in Moscow's efforts to ensure economic stability amid Western sanctions over the conflict in Ukraine.

FX sales are depleting funds from Russia's National Wealth Fund (NWF), finance ministry data showed. The ministry also said that Russia's federal budget had widened to around $34 billion in the first two months of this year as Moscow sharply raised expenditure while revenue fell amid slumping oil and gas takings.

Investors were also awaiting Federal Reserve Chair Jerome Powell's testimony later in the day for clues on the U.S. central bank's next move on rates. Brent crude oil, a global benchmark for Russia's main export, was up 0.2% at $86.4 a barrel.

Russian stock indexes were weaker. The dollar-denominated RTS index was down 0.4% to 958.1 points. The rouble-based MOEX Russian index was 0.4% lower at 2,284.9 points, pulling away from the near six-month high touched in the previous session. ($1 = 75.4000 roubles)

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