The Russian rouble fell even more on Friday than it had the day before. This happened because the central bank cut interest rates and hinted at more cuts to come. The possibility of loosening capital controls and a possible default by the government also hurt the currency.
The rouble fell around 10% against the dollar and the euro on Thursday, after the central bank cut its key rate to 11%. This was the third 300-basis-point cut in a row, as inflation is coming down from levels not seen in more than 20 years.
At 7:27 GMT, the dollar was worth 66.63 roubles, which was 2.1% less than it had been two weeks before. At 55.80 to the dollar on Wednesday, the rouble was at its best level since February 2018.
The rouble fell by 4.4% against the euro to 70.99, which is further from Wednesday’s seven-year high of 57.10 than it was before.
Capital controls helped the rouble rise, making it the best-performing currency in the world so far this year. New rules for paying for gas that require foreign money to be changed into roubles and a drop in imports have also helped.
But it no longer has the help of the end-of-month tax period, when companies that focus on exports usually turn foreign currency into roubles to pay local bills.
Economy Minister Maxim Reshetnikov said on Thursday that the strength of the currency, which has led to worries about how it will affect Russia’s exports and the money it makes from them, makes Russian goods less competitive abroad.
He believes that the 50% of foreign currency earnings that exporters must convert into roubles will be reduced even further.
The market is watching Russia’s National Settlement Depository (NSD), which has said it will pay interest on two Eurobonds worth $71.25 million and 26.5 million euros ($28.5 million) on Friday.
Even though Washington decided not to renew a key license that had let Moscow keep paying bondholders despite the sanctions put in place because of what it did in Ukraine, this is still the case.
Russian stock indexes were not all the same.
At 1,146.4 points, the dollar-based RTS index was down by 2.4%. At 2,425.4 points, the MOEX Russian index, which is based on the rouble, was up 0.5%.
(1 dollar = 0.9305 euros)
