MOSCOW: The Russian rouble was stable early on Tuesday following a decision by Russia’s central bank to cut its key rate, and buoyed by higher oil prices. At 0753 GMT, the rouble was 0.01 percent weaker against the dollar at 56.9 <RUBUTSTN=MCX> and had lost 0.1 percent to trade at 62.1 versus the euro <EURRUBTN=MCX>. Russia’s central bank cut its key interest rate on Friday to 9.25 percent from 9.75 percent for the second time this year and hinted at more cuts to come as inflation, already at a post-Soviet low, continues to fall. [nL8N1I03FK] It was a deeper cut than analysts and economists polled by Reuters beforehand predicted.
The market has priced in a more front-loaded monetary easing trajectory, VTB Capital analyst Maxim Korovin said in a note, but the rouble interest rates remain some of the highest in emerging markets. “That is to continue attracting international inflows, in our view, and provide support to forex,” he said. Russian markets were also waiting for a decision from a monetary policy meeting by U.S. Federal Reserve. The Federal Open Market Committee, the central bank’s policy setting group, will meet on Tuesday and Wednesday, with traders widely expecting it to leave rates unchanged in a target range of 1.00-1.25 percent.
Brent crude oil <LCOc1>, a global benchmark for Russia’s main export, was up 0.08 percent at $51.5 a barrel. Russian share indexes were also up. The dollar-denominated RTS index <.IRTS> was up 0.73 percent to 1,123 points, while the rouble-based MICEX <.MCX> was 0.67 percent higher at 2,030 points.
