Russian rouble marginally lower against dollar as traders await rate decision

Russian rouble marginally lower against dollar as traders await rate decision

A Russian rouble coin is seen in front of the Kremlin in Moscow.

MOSCOW Reuters - The Russian rouble was marginally lower against the dollar on Tuesday as the end of a favourable month-end tax payments period drew close, while investors waited for a central bank rate decision later this week.

The rouble was 0.13% weaker against the dollar at 61.33 and had gained 0.4% to trade at 60.34 against the euro at 0732 GMT. It had declined by 0.1% against the yuan to 8.32.

The rouble is facing a month-end tax period that usually sees export-focused firms convert foreign exchange revenues into roubles to pay domestic tax liabilities. Promsvyazbank analysts said that support for rouble positions is gradually decreasing due to the approaching end of tax payments.

The market is focusing on Friday's central bank rate decision, with a majority of analysts polled by Reuters expecting a hold of 7.5%.

According to Alfa Capital portfolio manager Evgeny Zhornist, the Bank of Russia is likely to take a watchful attitude in order to gather all the data and assess options.

He added that the rate-cutting cycle may resume next year, as reduced business activity and confidence, a drop in Russia's GDP and a strong rouble all favor soft monetary policy.

The central bank is expected to publish data on households' inflationary expectations later on Tuesday, an indicator it watches closely ahead of rate decisions.

Brent crude oil, a global benchmark for Russia's main exports, was down 0.6% at $92.7 a barrel.

With a good start to the week, it could be difficult for local indices to take another leg up without a significant driver, said BCS Global Markets.

The dollar-denominated RTS index was down 0.3% to 1,059. 9 points. The Russian rouble-based MOEX index was unchanged at 2,063.