The Russian rouble fell on Thursday after the central bank cut interest rates to 11% at an unscheduled policy meeting and after a tax period at the end of the month ended. However, capital controls kept it trading close to multi-year highs against the euro and the dollar.
The central bank cut its key rate by 300 basis points for the third time in a row. This lowered the cost of borrowing again after an emergency rate hike to 20% at the end of February, just days after Russia sent tens of thousands of troops into Ukraine.
Later on Thursday, Elvira Nabiullina, who is in charge of the central bank, will speak at a forum for bankers.
At 7:48 GMT, the rouble was 2.6% weaker against the dollar, at 60.89. It had dropped from Wednesday’s 55.80, which was its strongest level since February 2018, and was getting close to a near one-week low.
It had lost 4.4% against the euro to trade at 63.32, after reaching a seven-year high of 57.10 the day before.
The rouble started going down from those multi-year highs on Wednesday as the market waited for the bank’s decision. Inflationary expectations were going down, and the stronger rouble was keeping prices from going up.
Several economists had predicted a cut of 200 basis points.
So far this year, the rouble has been helped by capital controls, new gas payment terms that require foreign currency to be changed into the rouble, and a drop in imports.
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.
Russian stock indexes were not all the same.
The RTS index, which is measured in dollars, went down by 0.7% to reach 1230.4 points. At 2,378.4 points, the MOEX Russian index, which is based on the rouble, was up 1.7%.
