UPDATE 1-Russian rouble falls to 90 vs euro ahead of central bank rate decision
(Updates prices, adds Kremlin detail)
MOSCOW, Feb 12 (Reuters) – The growing prospect of new European Union sanctions against Russia knocked the rouble back to 90 per euro for the first time in a week on Friday ahead of a central bank board meeting that is expected to keep interest rates unchanged.
By 0939 GMT, the rouble was 0.7% weaker against the euro at 89.98, passing the 90 mark for the first time since Feb. 5.
Versus the dollar, the rouble dropped 1% to 74.33 , heading away from the three-week high of 73.5225 it touched on Thursday.
The Kremlin said Russia should be ready for the possibility of harsh sanctions from the EU, which is trying to persuade Moscow to free jailed Kremlin critic Alexei Navalny. Foreign Minister Sergei Lavrov said Moscow was ready to sever ties with the European Union in return.
Russia’s rate decision due at 1030 GMT is unlikely to have a substantial impact on the currency, Otkritie Bank said.
A Reuters poll this month showed Russia’s central bank was expected to keep its key rate at a record low of 4.25%, shrugging off the International Monetary Fund’s call for lower rates as inflation has overshot the 4% target.
Central Bank Governor Elvira Nabiullina will shed more light on the bank’s monetary policy plans at an online press conference at 1200 GMT.
The rouble could firm towards the 70-73 range against the dollar next week thanks to high oil prices and local month-end taxes that usually increase demand for the Russian currency, Otkritie said.
Brent crude oil, a global benchmark for Russia’s main export, was down 1% at $60.51 a barrel but still hovered near its highest levels since early 2020.
Russian stock indexes were down, falling to around one-week lows.
The dollar-denominated RTS index fell 2.4% to 1,425.8 points. The rouble-based MOEX Russian index slid 1.4% to 3,364.3 points.
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