Economic news

RUB, Stocks Retreat, OPEC+ Ministers agree to Boost Output

MOSCOW, July 19 (Reuters) - The rouble weakened on Monday, retreating from the 74 threshold versus the dollar it hit in the previous session, as oil prices fell after OPEC overcame internal divisions and agreed to boost output, also pushing Russian stocks lower.

At 0751 GMT, the rouble was 0.3% weaker against the dollar at 74.31, creeping towards a one-week low, and had lost 0.1% to trade at 87.58 versus the euro.

Oil prices were lower after OPEC ministers agreed on Sunday to increase oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.

Brent crude oil, a global benchmark for Russia’s main export, was down 1.3% at $72.61 a barrel.

“Despite the local drawdown, we view the increase in Russia’s oil production quota as positive for the rouble in the medium term,” said Promsvyazbank analysts in a note.

Russia and other emerging markets may see continued pressure from hesitancy over the global economic recovery, despite the U.S. earnings season so far exceeding expectations, BCS Global Markets said in a note.

The rouble does have the support of a month-end tax period which usually prompts export-focused companies to convert revenues in foreign currencies into roubles and expectations of a rate hike by the central bank later this week.

Governor Elvira Nabiullina said last month the board may consider raising rates from 5.5% by 25-100 basis points at its July 23 meeting to rein in inflation.

Russian stock indexes were at their weakest since late May.

The dollar-denominated RTS index was down 1.1% to 1,584.9 points, earlier touching its lowest since May 25. The rouble-based MOEX Russian index was 0.% lower at 3,739.2 points, its weakest since May 31.

Reporting by Alexander Marrow. Editing by Mark Potter

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree