World Economy

Ruble Slips With Oil

Ruble Slips With OilRuble Slips With Oil

The Russian ruble traded weaker early on Friday, tracking oil prices lower, as the market awaited a central bank monetary policy meeting later in the day at which the bank is expected to leave its main lending rate on hold.

At 0715 GMT, the ruble was 0.5% weaker against the dollar at 68.03 and had lost 0.7% to 76.88 versus the euro.

Brent crude oil, an important driver for all Russian assets, was 1.5% lower at $48.2 a barrel, Reuters reported.

The central bank will publish its updated monetary policy strategy later in the day.

“We expect the regulator to keep the key rate intact, meaning no impact for the Russian FX market. Oil is to remain the key factor for the ruble in the near term,” Maxim Korovin, a forex analyst at VTB Capital, said in a note.

Analysts said traders would look to the central bank’s new strategy document for clues as to the future direction of monetary policy, as well as for indications as to when the central bank could start buying foreign currency again to replenish its reserves.

All 23 economists polled by Reuters earlier this week predicted the bank would leave its key rate on hold at its current level of 11%, citing renewed ruble weakness and a recent rise in inflation.

The possibility the United States will raise interest rates later this month could also encourage Russian policymakers to act cautiously, since a US rate rise would tend to weaken the ruble.

Russian share indexes were mixed on Friday, reflecting moves in the ruble. The dollar-denominated RTS index was down 0.4% to 797 points, while its ruble-based peer MICEX was 0.1% higher at 1,721 points.