UPDATE 1-Rouble weakens on limited dollar supply; investor eyes on Fed policy

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Updates prices, adds OFZ detail, analyst comment) By Alexander Marrow MOSCOW, March 22 (Reuters) - The rouble weakened amid limited supply from exporters of dollars and euros on Wednesday, failing to piggy back on rising oil prices, while investors awaited the U.S. Federal Reserve's policy decision. By 1513 GMT, the rouble was 0.4% weaker against the dollar at 76.93 and had lost 0.6% to trade at 83.09 versus the euro , an 11-month low.


We expect the rouble to continue its gradual weakening move towards 80 against the dollar in the near future, said Veles Capital analysts in a note.


The rouble shed 0.1% against the yuan to 11.17 , paring some of the previous session's gains after a Moscow summit between presidents Vladimir Putin and Xi Jinping at which the Chinese currency's growing role in Russia's economy was discussed.


Brent crude oil , a global benchmark for Russia's main export, rose 0.9% to a one-week high of 76.0 a barrel, pulling further clear of the more than one-year low hit earlier this week.


Lower oil prices harm the rouble as they create risks of lower foreign currency inflows from Russian exports. General risk aversion is also at play, with geopolitical uncertainty and Western sanctions on Russian energy exports limiting the rouble's room to strengthen.


Russia's finance ministry sold 15.3 billion roubles ($198.33 million) worth of OFZ treasury bonds due in 2029 at one auction, before cancelling a second auction of an inflation-backed bond "due to the lack of bids at acceptable price levels". Investor attention globally is focused on whether the Fed will stick to its hawkish path to fight sticky inflation or pause interest rate hikes given recent trouble among banks which has included bankruptcy and last-minute rescues.


Russian stock indexes were lower.


The dollar-denominated RTS index was down 0.4% to 979.9 points. The rouble-based MOEX Russian index was 0.2% lower at 2,392.9 points, easing back from the previous session's six-month high of 2,431.23 points. For Russian equities guide see For Russian treasury bonds see ($1 = 77.1443 roubles) (Reporting by Alexander Marrow; Editing by Andrew Heavens and Christina Fincher)

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