MOSCOW: The Russian rouble weakened against the US dollar on Monday despite the central bank’s surprise 100-basis-point interest rate hike last week as the market remained focused on the impact of Western sanctions on the country’s foreign trade.

The central bank raised its benchmark interest rate to 19% from 18% on Friday, saying that inflation remained stubbornly high and action was needed to counter it.

By 0800 GMT, the rouble was down by 1.3% at 91.20 against the dollar, LSEG data showed.

Trading in major currencies in Russia has shifted to the over-the-counter (OTC) market, obscuring price data, since Western sanctions on the Moscow Exchange and its clearing agent, the National Clearing Centre, were introduced on June 12.

The rouble weakened by 0.3% to 12.80 against China’s yuan on the Moscow Stock Exchange.

Yuan has become the most traded foreign currency in Russia.

“The immediate impact of the central bank’s key rate decision on the rouble exchange rate should be limited,” Raiffeisen bank analysts said, adding that domestic demand and foreign trade were more significant factors.

“Given the ongoing tightening of sanctions pressure and its impact on exports and imports, it is difficult to isolate the effect of monetary conditions,” they added.

Russian rouble weakens before central bank rate decision

One-day rouble-dollar futures, which trade on the Moscow Exchange and are a guide for OTC market rates, were down 0.2% at 90.69.

The central bank’s official exchange rate, which it calculates using OTC data, was set at 90.93 to the dollar.

The rouble was down by 1.7% at 101.41 against the euro , LSEG data showed.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.8% at $72.17, amid expectations of a US interest rate cut this week.