Russian rouble slips to near 7-week low vs yuan

MOSCOW: The rouble weakened to a near seven-week low against the yuan on Thursday and also edged lower versus the dollar, as markets reacted to Federal Reserve comments on interest rates and the Russian currency was squeezed by the end of a favourable tax payment period.

At 0758 GMT, the rouble had shed 0.4% against the yuan to 8.63, hitting its weakest since Oct. 14.

It was 0.2% weaker against the dollar at 61.10 and had lost 1.1% to trade at 63.79 versus the euro.

While the yuan has been making gradual inroads into Russia for years, the crawl has turned into a sprint in the past nine months as the currency swept into the country's markets and trade flows, according to a Reuters review of data and interviews with 10 business and finance players.

U.S. Federal Reserve Chair Jerome Powell said interest rate hikes could be scaled back "as soon as December", which pushed the dollar lower.

But the rouble has now lost support from a favourable month-end tax period that usually sees Russian exporters convert foreign currency revenues into roubles to pay local liabilities.

Brent crude oil, a global benchmark for Russia's main export, was down 0.6% at $86.5 a barrel. Russian stock indexes were higher.

"The landscape for the Russian market has been unchanged for several days - the iMOEX index see-saws on sluggish trading activity and it is likely to continue trading without clear growth drivers till the end of December," said BCS World of Investments.

The dollar-denominated RTS index was up 0.3% to 1,128.5 points. The rouble-based MOEX Russian index was 0.7% higher at 2,188.6 points.