Russian rouble falls to over one-week low past 89 vs dollar

The Russian rouble fell to a more than one-week low past 89 to the dollar on Thursday, moving further away from last week's multi-month high, but still buoyed by capital controls introduced last month and higher oil prices. By 1451 GMT, the rouble was 1.1% weaker against the dollar at 89.50, earlier hitting its weakest point since Nov. 20.

The Russian rouble fell to a more than one-week low past 89 to the dollar on Thursday, moving further away from last week's multi-month high, but still buoyed by capital controls introduced last month and higher oil prices.

By 1451 GMT, the rouble was 1.1% weaker against the dollar at 89.50, earlier hitting its weakest point since Nov. 20. It had lost 0.3% to 97.60 versus the euro and shed 0.7% against the yuan to 12.49.

The rouble's rally is showing signs of petering out after seven successive weeks of gains. The Russian currency has rebounded from more than 100 to the dollar, thanks to reduced capital outflows since President Vladimir Putin introduced the forced conversion of some foreign currency revenue for exporters in October.

The rouble's efforts to strengthen since a favourable month-end tax period expired on Tuesday show that the measures taken by the authorities to support the Russian currency are working, said Alor Broker's Alexei Antonov. High oil prices and the prospect of more monetary tightening are supporting the rouble, too. The Bank of Russia, which meets on Dec. 15, raised rates to 15% in late October and has signalled that another increase may be needed.

Data on Wednesday showed that Russia's industrial output growth slowed in October as the unemployment rate dropped to a record low 2.9%, with deepening labour shortages showing signs of cooling Moscow's military production capacity. Separate data showed that weekly inflation rose again.

"Current price dynamics, against the backdrop of still high consumer demand in the economy in October raises the likelihood of an increase in the Bank of Russia's key rate ... on Dec. 15," said Renaissance Capital analysts in a note. Brent crude oil, a global benchmark for Russia's main export, was up 1.1% at $84.01 a barrel.

Russian stock indexes were lower. The dollar-denominated RTS index was down 1.3% at 1,113.3 points. The rouble-based MOEX Russian index was 0.4% lower at 3,161.9 points.