Russian rouble falls past 90 vs euro as central bank holds rates

MOSCOW: 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 as the central bank kept interest rates unchanged, in a move already priced in by the market.

By 1057 GMT, the rouble was 0.7% weaker against the euro at 89.98, having earlier eased past the 90 mark for the first time since Feb. 5.

Versus the dollar, the rouble dropped 1% to 74.32 , away from the three-week high of 73.5225 it touched on Thursday.

The rouble did not react to the central bank holding its key rate at a record low of 4.25%, as forecast in a Reuters poll this week, and dropping a reference to possible cuts in the future.

"Policy in Russia is hawkish because of sanctions risks - they see more sanctions coming, risks to the rouble, hence the hawkish comments today," said Timothy Ash at BlueBay Asset Management.

The Kremlin on Friday 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.

Central Bank Governor Elvira Nabiullina will shed more light on the bank's monetary policy plans at an online press conference at 1200 GMT.

Brent crude oil, a global benchmark for Russia's main export, was down 0.5% at $60.86 a barrel but still near its highest levels since early 2020.

Russian stock indexes were down, falling to around one-week lows.

The dollar-denominated RTS index fell 1.9% to 1,433.6 points. The rouble-based MOEX Russian index slid 0.9% to 3,382.4 points.