Russian rouble slides to more than six-week low after central bank rate cut

The Russian rouble weakened beyond the 80 mark to the dollar for the first time in more than six weeks on Monday as the market reacted to the Bank of Russia cutting interest rates by 200 basis points to 18% late last week.

Friday’s rate move was the biggest cut in borrowing costs since May 2022, with the central bank hoping to revive lending and boost flagging economic growth after stubbornly high inflation showed signs of easing.

The rouble was down 0.6% as of 1057 GMT at 79.90 per U.S. dollar, according to data compiled by LSEG based on over-the-counter quotes. The rouble hit a low of 80.60 earlier in the session, its weakest point since June 12.

“It is obvious that the factor of rouble support in the form of tight monetary policy will gradually start to decrease its influence on the national currency,” Maxim Timoshenko from Russian Standard Bank.

Against the Chinese yuan, the most traded foreign currency in Russia, the rouble weakened by 0.7% to 11.13.

Brent crude oil, a global benchmark for Russia’s main export, was up 1.1% at $69.17 a barrel.