Russian rouble falls as oil prices plumb new 3-month depths

The Russian rouble weakened on lower oil prices on Wednesday, as the finance ministry held debt auctions and investors looked ahead to this week's interest rate decision by the Bank of Russia. By 1241 GMT, the rouble was 0.9% weaker against the dollar at 75.98 and had gained 0.3% to trade at 80.39 against the euro.

The Russian rouble weakened on lower oil prices on Wednesday, as the finance ministry held debt auctions and investors looked ahead to this week's interest rate decision by the Bank of Russia.

By 1241 GMT, the rouble was 0.9% weaker against the dollar at 75.98 and had gained 0.3% to trade at 80.39 against the euro. It had shed 0.5% against the yuan to 10.99. Brent crude, a global benchmark for Russia's main export, was down 2% at $75.9 a barrel, its lowest mark since mid-December.

The rouble hit its strongest level against the dollar since the start of March early on Tuesday, before easing. The U.S. currency has come under pressure from fears of a broader banking crisis following the collapse of Silicon Valley Bank. Currency interventions are providing some support to the rouble, as Russia is selling 5.4 billion roubles ($71.7 million) worth of Chinese yuan per day between March 7 and April 6 to compensate for lower oil and gas revenues.

Domestic attention is focused on Russia's central bank, which will set interest rates on Friday and has signalled it will weigh up hiking rates in the coming months. Analysts polled by Reuters widely expect the bank to hold its key interest rate at 7.5% before possibly raising the cost of borrowing later this year.

Russia's finance ministry sold 74.7 billion roubles in OFZ treasury bonds at auctions on Wednesday, with one still to come, after a pause in debt issuance last week. "Investors will continue to be cautious in the debt market ahead of this Friday's central bank meeting," said Promsvyazbank analysts. "With expectations that the key rate will be held, the regulator's signal will likely remain quite hawkish."

Russian stock indexes were lower. The dollar-denominated RTS index was down 2% to 938.9 points. The rouble-based MOEX Russian index was 1.1% lower at 2,264.5 points. ($1 = 75.3700 roubles)