Russian rouble climbs as central bank raises rates to 13%

By Alexander Marrow

(Reuters) -The rouble strengthened on Friday as the Russian central bank raised interest rates to 13%, a move anticipated by the market as the country battles inflationary pressures exacerbated by its weak currency.

The central bank had hiked rates by 350 basis points to 12% at an emergency meeting last month, responding to the rouble’s tumble past 100 to the dollar, and most analysts polled by Reuters had expected Friday’s increase.

But as the currency hit six-week highs early this week, some economists, including the CEOs of Russia’s two largest banks, had been leaning in favour of a hold.

By 1100 GMT, the rouble was 0.8% stronger against the dollar at 96.57, showing limited reaction to the decision.

It had gained 0.9% to trade at 102.92 versus the euro and had firmed 0.7% against the yuan to 13.25.

Central bank governor Elvira Nabiullina will shed more light on monetary policy and other issues at a press conference at 1200 GMT.

“For the rouble it is a delayed positive and the exchange rate may start to recover,” said BCS World of Investments analyst Mikhail Zeltser. “In the medium term, expectations are more for 90 to the dollar than staying near the psychological 100 bar.”

The central bank sharply increased its foreign currency sales for a week starting on Thursday, seeking to compensate for the planned redemption of $3 billion worth of Russian Eurobonds on Sept. 16, but the rouble was unable to capitalise significantly.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.3% at $93.97 a barrel, hitting its strongest since November 2022. [O/R]

Russian stocks were mixed.

The dollar-denominated RTS index was up 0.6% at 1,024.6 points. The rouble-based MOEX Russian index was unchanged at 3,140.3 points.

(Reporting by Alexander Marrow; Editing by Nick Macfie, Alison Williams and Jane Merriman)