Rouble hits over two-month low vs dollar as c.bank holds rates

The Russian rouble hit a more-than-two-month low past 83 against the dollar on Friday, showing limited reaction as the Bank of Russia kept interest rates on hold, under pressure from geopolitical risks and foreign currency demand.

The Russian rouble hit a more-than-two-month low past 83 against the dollar on Friday, showing limited reaction as the Bank of Russia kept interest rates on hold, under pressure from geopolitical risks and foreign currency demand. By 1051 GMT, the rouble was 0.1% weaker against the dollar at 82.65, earlier hitting 83.04, its weakest since April 7.

It had gained 0.1% to trade at 89.01 versus the euro and firmed 0.3% against the yuan to 11.56 . The central bank held rates as expected, but said inflation risks were rising and that it would hold open the prospect of increasing the key rate at upcoming meetings.

The rise in Russia's weekly consumer prices accelerated sharply this month, data showed on Wednesday, justifying the central bank's decision to maintain a hawkish stance. Governor Elvira Nabiullina will shed more light on monetary policy and other issues at a media conference at 1200 GMT.

Raiffeisen Bank analysts said the central bank is conducting monetary policy this year amid high uncertainty, particularly concerning fiscal policy. Russia recorded a marginal budget surplus in May, but the deficit for the year as a whole far exceeds the annual plan, and many analysts anticipate that the finance ministry will exceed its 29.1 trillion rouble ($350.8 billion) expenditure target for 2023.

"Given the pro-inflationary nature of this factor, we expect the central bank to tighten the signal," the analysts said. Brent crude oil, a global benchmark for Russia's main export, was up 0.2% at $76.08 a barrel.

Russian stock indexes were higher. The dollar-denominated RTS index was up 0.3% to 1,035.4 points. The rouble-based MOEX Russian index was 0.3% higher at 2,716.3 points.

Shares of Russian oil major Surgutneftegaz were up 5.4% after the company reported a profit slump

in 2022, while its cash reserves increased to 4.3 trillion roubles. ($1 = 82.9500 roubles)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)