Russian rouble pulls back from six-week high vs dollar

MOSCOW: The Russian rouble weakened marginally on Thursday, still supported by high oil prices and increasing foreign currency sales by exporters, but pulling back from a more than six-week high to the dollar on the eve of an expected interest rate hike.

Analysts polled by Reuters expect the Bank of Russia to raise its benchmark rate by 100 basis points to 14% on Friday and give another hawkish signal to the market, as it tries rein in accelerating inflation exacerbated by the rouble's weakness.

At 07.50 GMT, the rouble was 0.1% weaker against the dollar at 93.39, not far from 92.7350, its strongest point since Sept. 12, hit in the previous session. It had gained 0.2% to trade at 98.58 versus the euro and shed 0.1% against the yuan to 12.73 .

Dmitry Pyanov, finance chief at Russia's No. 2 lender VTB , said on Thursday he hoped rates would rise by 100 basis points only, with increased liability costs and a lending slowdown among the negative consequences for his bank as a result of 550 basis points of interest rate hikes since July.

Also supporting the rouble are month-end tax payments, due on Oct. 30, that usually see exporters convert foreign exchange (FX) revenues to pay domestic liabilities.

Additionally, President Vladimir Putin's decree on mandatory FX sales came into force last week, requiring 43 groups of exporters to repatriate 80% of FX revenues and then sell 90% of that sum. The rouble has strengthened from beyond 100 to the dollar since the decree was announced.

Brent crude oil, a global benchmark for Russia's main export, was unchanged at $90.15 a barrel. Russian stock indexes were higher.

The dollar-denominated RTS index was up 0.1% to 1,104.5 points. The rouble-based MOEX Russian index was 0.3% higher at 3,273.7 points.