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Russian Rouble Weakens as Investors Anticipate Another Interest Rate Increase

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“The Russian rouble takes a breather as investors prepare for the impact of yet another rate hike, signaling the country’s commitment to stability amidst global economic uncertainties.”

The Russian rouble weakened against the dollar on Friday, as the market anticipated the central bank’s meeting, where an interest rate hike is expected. Analysts predict that the Bank of Russia will raise its benchmark rate by 100 basis points to 14% to combat inflation pressure. At the moment, the rouble is 0.3% weaker against the dollar at 94.19, stepping back from its strongest point since September 12. The central bank will announce its rate decision later today, with Governor Elvira Nabiullina shedding more light on monetary policy and other matters at a news conference. Despite a slight decrease, inflation expectations remain high, which is unlikely to sway the central bank’s decision. The rouble has been supported by month-end tax payments that require exporters to convert foreign exchange revenues to pay domestic liabilities. Additionally, President Vladimir Putin’s decree on mandatory FX sales has boosted the currency. Brent crude oil, Russia’s main export, is up 1.6% at $89.35 a barrel.

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