By Alexander Marrow
MOSCOW (Reuters) – The Russian rouble slumped past 68 per U.S. dollar to a more than seven-month low on Monday, hurt by low oil prices and fears that sanctions on Russian oil could crimp the country’s export revenue.
By 1248 GMT, the rouble was 5.3% weaker against the dollar at 68.02, its weakest mark since May 11.
The currency also lost 4.2% to trade at 72.00 against the euro, its weakest since May 6. It shed 5% versus the yuan to 9.74, its weakest level since early July.
“If the rouble holds above 65 (which could happen if exporters remain inactive in spite of the looming tax and dividend payments), we could see it move into the 67-70 range before long,” said SberCIB Investment Research in a note.
Relatively low oil prices and risks of lower export revenue in the light of the $60-a-barrel price cap on Russian oil imposed by the G7, the European Union and Australia, have pressured the rouble.
Brent crude oil, a global benchmark for Russia’s main export, was up 0.8% at $79.7 a barrel, but this month has traded at its lowest all year.
Despite the sharp slump, analysts expect that upcoming month-end tax payments, when exporters convert foreign currency revenue into roubles to pay local liabilities, will provide support.
“Our view on oil, upcoming taxes and dividends allow us to maintain a forecast for a small rise in the near term (to 63-64/USD),” said Dmitry Polevoy, head of investment at Locko Invest.
The rouble barely reacted when Russia’s central bank on Friday held its key interest rate at 7.5%, but slightly shifted its tone to acknowledge growing inflation risks, saying a recent military mobilisation was adding to labour shortages.
Russian stock indexes were falling.
“Russian equities are set for a weaker open this morning as investors digest the latest sanctions, coupled with static commodity prices, and a lack of domestic catalysts,” said Alfa Bank equity strategist John Walsh.
The dollar-denominated RTS index was down 5.4% to 982.8 points, a more than two-month low. The rouble-based MOEX Russian index was 0.6% lower at 2,119.6 points.
(Reporting by Alexander Marrow; Editing by Bradley Perrett, Ed Osmond and Arun Koyyur)
