The Russian rouble weakened towards 62 against the dollar on Monday, steered by internal market flows and capital controls, while stock indexes extended losses after the latest Western sanctions.

At 0731 GMT, the rouble was 0.9% weaker against the dollar at 61.46, stabilising in the relatively narrow range of 60.0-62.5 in the past few days after rapid swings in May.

Against the euro, the rouble shed 0.8% to 65.31 , heading away from a near seven-year high of 57.10 hit on May 25.

The rouble on the Moscow Exchange is driven by capital controls that Russia imposed to protect its financial system soon after sending tens of thousands of troops into Ukraine on Feb. 24.

The Russian currency remains much weaker at banks. VTB, Russia's second-largest lender, offered to sell cash dollars and euros for 84.00 and 89.00 rouble respectively.

Sanctions remain in focus. On Friday, EU countries agreed their sixth package of sanctions against Russia over what it calls a "special military operation" in Ukraine, including an import ban on all Russian seaborne crude oil and petroleum products in six to eight months.

Russia's National Settlement Depository (NSD), which Moscow had planned to use to service its Eurobonds, will suspend transactions in euros after the European Union added the entity to its extended sanctions list.

On the local debt market, yields on 10-year OFZ treasury bonds fell to 9.01%, as the market awaited the central bank rate decision due on Friday. Yields on 2-year OFZs were down at 9.15%, moving inversely with their prices.

Short-tenor OFZ bonds already price in a cut to the key rate to 10% from 11% this week, Promsvyazbank analysts said in a note.

Russian stock indexes were down.

The dollar-denominated RTS index fell 1.9% to 1,176.5 points. The rouble-based MOEX Russian index was 0.3% lower at 2,302.9 points.

 

For Russian equities guide see

For Russian treasury bonds see

(Reporting by Reuters; Editing by Angus MacSwan)


Reuters