(Reuters) – The Russian rouble weakened on Thursday as the central bank cut interest rates to 11% at an off-schedule policy meeting and a month-end tax period passed, though capital controls kept it trading not far from multi-year highs to the euro and dollar.
The central bank cut its key rate by 300 basis points for the third time in a row, softening the cost of borrowing again after an emergency rate hike to 20% in late February, days after Russia sent tens of thousands of troops into Ukraine.
Central bank governor Elvira Nabiullina is due to speak at a banking forum later on Thursday.
By 0748 GMT, the rouble was 2.6% weaker against the dollar at 60.89, tumbling from 55.80, its strongest level since February 2018 which it hit on Wednesday, and edging towards a near one-week low.
It had lost 4.4% to trade at 63.32 versus the euro, having touched a seven-year high of 57.10 in the previous session.
The rouble started falling from those multi-year highs on Wednesday as the market anticipated the bank’s decision as inflationary expectations fell and with the firmer rouble holding down price growth.
Several analysts had predicted a 200-basis-point cut.
The rouble has been supported so far this year by capital controls, new gas payment terms requiring conversion of foreign currency into the currency and a fall in imports.
But it has now lost the support of the month-end tax period that usually sees export-focused companies convert foreign currency into roubles to pay local liabilities.
Russian stock indexes were mixed.
The dollar-denominated RTS index was down 0.7% to 1230.4 points. The rouble-based MOEX Russian index was 1.7% higher at 2,378.4 points.
(Reporting by Reuters; Editing by Raissa Kasolowsky and Jane Merriman)
