MOSCOW, March 22 (Reuters) - The Russian rouble cut some losses after hitting a more than two-week low versus the dollar on Monday as new sanctions against Moscow loomed and Turkey’s nosediving lira led to a drop in risk appetite.
By 1201 GMT, the rouble was 0.4% weaker against the dollar at 74.39. Earlier, it slumped to 74.8250, its weakest mark since March 4.
It had lost 0.6% to trade at 88.75 versus the euro .
Turkey’s lira briefly fell 15% to near its all-time low after President Tayyip Erdogan’s shock weekend ousting of a hawkish central bank governor sparked fears of a reversal of recent rate hikes, putting pressure on riskier assets.
The threat of more U.S. sanctions is also hanging over the rouble, with an announcement expected this week.
“If U.S. sanctions this week are limited to personal restrictions and additional measures against Nord Stream 2, the rouble could well return to the 73-74/USD range after short-term volatility,” said Dmitry Polevoy, head of investment at Locko Invest.
The rouble has suffered in the past week since U.S. President Joe Biden said his Russian counterpart Vladimir Putin would “pay a price” for alleged meddling in the 2020 U.S. election.
Foreign Minister Sergei Lavrov on Monday called for Moscow and Beijing to reduce their dependence on the U.S. dollar and Western payment systems to push back against what he called the West’s ideological agenda.
Support for the Russian currency should come this week from a month-end tax payments period that usually leads export-focused companies to convert foreign currency revenues to meet local liabilities.
Despite the tax payments, there was no liquidity shortage on the interbank market. The central bank sold 55.2 billion roubles ($742.1 million) at long-term repo auctions on Monday, the first since last week’s surprise 25 basis point rate hike, but demand was far lower than in the final few months of 2020.
Brent crude oil, a global benchmark for Russia’s main export, erased its earlier losses to trade 0.1% higher at $64.55 a barrel, helping Russian stock indexes gain.
The dollar-denominated RTS index was up 0.1% to 1,476.0. The rouble-based MOEX Russian index was 0.3% higher at 3,484.8.
($1 = 74.3860 roubles)
(Editing by Subhranshu Sahu)