The Russian rouble extended the previous session’s sharp slide on Wednesday, slumping to its lowest since late May against the dollar and euro and heading back towards levels the government prefers as intervention speculation swirled.
The rouble hit more than seven-year highs a week ago, but has shed over 20% since then against the greenback as several officials voiced concerns about its strength, which dents Russia’s income from exporting commodities and other goods priced in dollars and euros. By 0726 GMT, the rouble was 4.5% weaker against the dollar at 63.90 after touching 64.9525, its weakest point since May 30.
It had lost 3.5% to trade at 65.83 versus the euro , after slumping to 66.6450, also a May 30 low. The rouble is continuing a downward correction from multi-year highs in anticipation of measures to rein in the currency, Veles Capital said in a note.
The currency embarked on its hefty slide soon after Finance Minister Anton Siluanov said Russia could turn to currency intervention to keep a lid on the rouble’s appreciation. The central bank declined to comment on whether intervention happened on Tuesday as the rouble dived by around 10%, while the finance ministry said it did not plan to use anticipated extra budget revenue to buy foreign currency or gold.
“I don’t think the finance ministry and central bank have started doing anything,” said a trader at a major Russian bank. “If they do, they’ll look like a bull in a china shop, and this is not their style.” Russian stock indexes were mixed.
The dollar-denominated RTS index was down 3.1% to 1,111.2 points, after earlier hitting its lowest point since May 11. The rouble-based MOEX Russian index was 1.2% higher at 2,254.1 points.