(Reuters) – The Russian rouble pared losses after tumbling to its weakest against the U.S. dollar in more than five months on Thursday on fresh pressure from the West’s price cap on Russia’s oil exports.
The rouble fell to 64.95 against the U.S. dollar in morning trade in Moscow for its lowest reading since July 6, before recouping. By 0945 GMT, the rouble was trading down 0.2% for the session at 64.10.
Against the euro, the rouble hit an 11-week low before recovering to stand up 0.1% at 68.25, while the currency was flat against the Chinese yuan at 9.17.
After crashing to historic lows when Moscow sent tens of thousands of troops into Ukraine on Feb. 24 and the West imposed sweeping sanctions on Russia, strict capital controls have helped the rouble to rebound strongly over the summer.
However, fears of a global recession combined with the European Union’s embargo on Russian oil exports and a Western price cap have heaped pressure on the Russian currency.
Recent weakness in the rouble comes even as prices for benchmark crude oil have recovered above $80 a barrel after hitting their lowest for the year last week.
Analysts said a fall in foreign currency earnings by Russian exporters – who are required to convert at least half of their foreign earnings into roubles – was weighing on the currency.
Russian stock indexes were down on Thursday.
The dollar-denominated RTS index lost 1% to stand at 1,049.7 points, while the rouble-based MOEX Russian index was also down 1% at 2,137.3 points.
Also in focus was an upcoming central bank meeting tomorrow. The regulator is expected to hold interest rates at 7.5% in its final rate-setting decision of the year.
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(Reporting by Jake Cordell; Editing by David Goodman and Arun Koyyur)
