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Russian rouble weakens as central bank cuts rates 300 bps  to 11% 

Russian rouble weakens as central bank cuts rates 300 bps  to 11% 

By 0748 GMT, the rouble was 2.6% weaker against the dollar at 60.89, tumbling from 55.80, its strongest level since February 2018 which it hit on Wednesday, and edging towards a near one-week low.

 A vendor counts Russian rouble banknotes at a market. (Photo: Reuters) A vendor counts Russian rouble banknotes at a market. (Photo: Reuters)

The Russian rouble weakened on Thursday as the central bank cut interest rates to 11% at an off-schedule policy meeting and a month-end tax period passed, though capital controls kept it trading not far from multi-year highs to the euro and dollar.

The central bank cut its key rate by 300 basis points for the third time in a row, softening the cost of borrowing again after an emergency rate hike to 20% in late February, days after Russia sent tens of thousands of troops into Ukraine. Read full story

Central bank governor Elvira Nabiullina is due to speak at a banking forum later on Thursday.

By 0748 GMT, the rouble was 2.6% weaker against the dollar at 60.89 RUBUTSTN=MCX, tumbling from 55.80, its strongest level since February 2018 which it hit on Wednesday, and edging towards a near one-week low.

It had lost 4.4% to trade at 63.32 versus the euro EURRUBTN=MCX, having touched a seven-year high of 57.10 in the previous session.

The rouble started falling from those multi-year highs on Wednesday as the market anticipated the bank's decision as inflationary expectations fell and with the firmer rouble holding down price growth.

Several analysts had predicted a 200-basis-point cut. Read full story

The rouble has been supported so far this year by capital controls, new gas payment terms requiring conversion of foreign currency into the currency and a fall in imports.

But it has now lost the support of the month-end tax period that usually sees export-focused companies convert foreign currency into roubles to pay local liabilities.

Russian stock indexes were mixed.

The dollar-denominated RTS index .IRTS was down 0.7% to 1230.4 points. The rouble-based MOEX Russian index .IMOEX was 1.7% higher at 2,378.4 points.