Russian rouble eases ahead of expected rate hold by cenbank

The rouble weakened in early trade on Friday, ahead of an interest rate decision where the central bank is widely expected to keep borrowing costs unchanged at 16%, with high oil prices and month-end taxes also buttressing the Russian currency.

The rouble weakened in early trade on Friday, ahead of an interest rate decision where the central bank is widely expected to keep borrowing costs unchanged at 16%, with high oil prices and month-end taxes also buttressing the Russian currency. At 0646 GMT, the rouble was 0.3% weaker against the dollar at 92.37 and had lost 0.1% to trade at 100.14 versus the euro. It had firmed 0.1% against the yuan to 12.72.

All 24 analysts polled by Reuters this week forecast the rate hold, with many economists expecting the bank to start easing monetary policy in June as inflation is stubbornly high. "We do not think the central bank's comments on the rate decision will fundamentally change the balance of forces on the FX market, but trading volatility may increase in the short term," said Alor Broker's Alexei Antonov.

Brent crude oil, a global benchmark for Russia's main export, was down 0.6% at $85.27 a barrel. It reached its highest point since early November this week. Month-end taxes that usually see exporters convert foreign currency revenues to meet local liabilities are also supporting the rouble.

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