Rouble Tumbles Beyond 80: Market Reacts to Rate Cut
The Russian rouble weakened against the dollar to over 80, following the Bank of Russia's significant interest rate cut. The move aims to spur lending and economic growth, following persistent high inflation. The change in monetary policy may reduce the rouble's support factor, impacting its strength.
The Russian rouble fell beyond the 80 mark against the dollar for the first time in more than six weeks. This decline follows the Bank of Russia's decision to slash interest rates by 200 basis points to 18%, a strategic move to boost economic growth by encouraging lending amidst easing inflation.
As of 1057 GMT, the rouble depreciated by 0.6% to 79.90 per U.S. dollar, as reported by LSEG from over-the-counter quotes. It reached a low of 80.60 earlier, marking its weakest since mid-June. "The support from tight monetary policy for the rouble is expected to diminish," stated Maxim Timoshenko from Russian Standard Bank.
In trading against the Chinese yuan, a key foreign currency for Russia, the rouble dropped 0.7% to 11.13. Meanwhile, Brent crude oil, a crucial export for Russia, rose by 1.1% to reach $69.17 per barrel.
(With inputs from agencies.)
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