Russian rouble slumps to weakest vs dollar since late April

MOSCOW: The Russian rouble slid on Thursday to its weakest level against the dollar since late April, driven down by market demand for foreign currency and Russia's lower export earnings.

At 0705 GMT, the rouble was 1% weaker against the dollar at 73.03, after hitting its lowest point since April 27, 2022 at 73.3850 earlier in the session.

It had lost 1.1% to trade at 78.26 versus the euro and fell 1% against the yuan to 10.78. Russia is now selling 8.9 billion roubles ($121.83 million) worth of foreign currency per day, compensating for lower oil and gas revenues.

Slumping energy revenues and soaring expenditure pushed Russia's federal budget to a deficit of about $25 billion in January, as sanctions and the cost of Moscow's military campaign in Ukraine weighed on the economy.

Also in focus on Thursday were interest rates, with Russia's central bank expected to hold its key interest rate at 7.5% on Friday in the first rate-setting meeting of the year.

Analysts polled by Reuters see the bank to express a more hawkish view and signal that future rate hikes are on the cards, since inflation remains well above Russia's official 4% target.

The falling rouble comes despite stronger global energy prices, with Brent crude oil, a global benchmark for Russia's main export, up 0.1% at $85.16 a barrel. Russia's stock markets were mixed at the open.

The rouble-based MOEX index was 0.2% stronger at 2,257.3 points, while the dollar-based RTS index was down, because of the weakness of the rouble. The RTS index slumped 0.8% to 974.1 points at the start of trading in Moscow.

Russian shares have seen volatile trading this week as the government has eyed a one-off windfall tax on firms that have posted "excess profits". The tax could raise 200 billion to 250 billion roubles ($2.8 billion to $3.5 billion) to cover the widening budget deficit.