September 7 – The Russian ruble fell further against the dollar on Thursday, hitting a three-week low, after taking a brief breather in the previous session on news that the country’s central bank planned to increase foreign exchange sales.
The ruble was down 0.38% at 98.50 against the dollar and 0.1% against the euro at 105.60 by 0805 GMT.
Earlier it hit lows of 98.54 against the dollar and 105.66 against the euro, the lowest levels since August 15.
Continued strong foreign exchange demand from importers weighed on the ruble, outweighing support from high oil prices, with benchmark Brent crude remaining above $90.
Traders said this partly reflects the lag between sales of Russian oil on foreign markets and receipt of foreign exchange earnings in local markets, although some expect rising oil prices to start to have an impact and help the ruble appreciate.
“We expect money supply to increase in the near future and stabilize the ruble exchange rate due to rising oil prices,” ALOR Broker said in a note.
After the ruble hit a 17-month low of 101.75 against the U.S. dollar, the central bank urgently raised interest rates by 350 basis points to 12% on August 15, and said it would not rule out raising interest rates again at its next meeting on September 15. 15.
“We believe the ruble is likely to continue to weaken gradually ahead of the regulators’ meeting,” said Bogdan Zvarich of banki.ru.
The central bank said on Wednesday it would sell a total of 150 billion rubles ($1.53 billion) worth of foreign currency between September 14 and 22, equivalent to 21.4 billion rubles per day, up from 2.3 billion rubles previously.
With markets anticipating a rate hike next week, the central bank canceled two OFZ bond auctions on Wednesday, citing a lack of bids at acceptable prices.
Russian stock indexes were firmer on Thursday, with the dollar-denominated RTS index and the ruble-denominated MOEX Russia index both up about 0.35%.