Russian rouble slides to 74.5 per dollar as oil prices drop

• The rouble was 2.7% weaker against the dollar at 74.53 and shed 3.3% to trade at 83.42 versus the euro.
• Responding to the coronavirus outbreak and its potential aftermath, the Russian government said it would create an anti-crisis fund of 300 billion roubles ($4.1 billion) to support its economy.

MOSCOW: The Russian rouble fell sharply again on Monday partly in response to a rapid drop in oil prices as well as concerns about the impact of the coronavirus on financial markets and the Russian economy.

At 0818 GMT, the rouble was 2.7% weaker against the dollar at 74.53 and shed 3.3% to trade at 83.42 versus the euro.

Responding to the coronavirus outbreak and its potential aftermath, the Russian government said it would create an anti-crisis fund of 300 billion roubles ($4.1 billion) to support its economy.

The central bank is also in focus as it will hold a rate-setting meeting on Friday and is expected to shed more light on its futures moves to ensure financial stability.

The rouble is hovering above its weakest levels since early 2016 of 75.49 versus the dollar and 85 against the euro it hit earlier this month, but it is much weaker than levels of 63.5 and 68.5, respectively, reached a month ago.

So far this year, the Russian rouble is one of the worst-performing currencies against the dollar, having lost more than 17% of its value since late 2019.

The sudden drop in the price of oil, one of Russia' key exports, has put the rouble under even more pressure.

"The backdrop remains negative for the Russian market," said ING, referring to lower oil and expectations of lower demand for Russian exports.

ING also said it had revised the year-end rouble forecasts to 70 against the dollar from 66.

On Monday, oil prices extended losses as an emergency rate cut by the U.S. Federal Reserve failed to soothe global financial markets panicked by the rapid spread of the coronavirus, while a price war rages on between major oil  producers.

Brent crude oil, a global benchmark for Russia's main export, was down 5.5% at $31.98 a barrel.

Russian stock indexes slid after a short-lived respite. The dollar-denominated RTS index was down 3.3% to 958.8 points. The rouble-based MOEX Russian index was 2% lower at 2,268.8 points.