RUSSIA: The Russian rouble fell further on Friday after plunging the previous session as the central bank cut interest rates, signalling more cuts to come, and the prospect of easing capital controls and a possible sovereign default weighed on the currency.
On Thursday, the rouble fell around 10% against the dollar and euro after the central bank cut its key rate to 11%, the third 300-basis-point cut in a row, as inflation eased from more than 20-year highs.
The rouble was 2.1 percent weaker against the dollar at 66.63, a more than two-week low, at 0727 GMT. On Wednesday, the rouble reached its highest level against the US dollar since February 2018, reaching 55.80. The rouble fell 4.4 percent against the euro to 70.99, falling further from the seven-year high of 57.10 set on Wednesday.
The rouble had artificially risen to become the world's best-performing currency this year, aided by capital controls. New gas payment terms requiring the conversion of foreign currency into roubles, as well as a drop in imports, have also contributed. However, it has now lost the support of the month-end tax period, when export-focused companies typically convert foreign currency into roubles to pay local liabilities.
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