MOSCOW: The Russian rouble weakened slightly against the US dollar and China’s yuan on Thursday, the day before a central bank board meeting in which analysts expect a hike in the central bank’s key interest rate to fight inflation.

At 0800 GMT, the rouble was down 0.4% at 96.80 against the dollar and down by 0.5% at 13.44 against China’s yuan.

“The central bank’s decision on the interest rate and the regulator’s comments on the future course of monetary policy could stir the markets, including the currency market,” BCS brokerage analysts said.

“Considering the overall factors and the technical overbought condition of foreign currencies, the likelihood is that foreign currencies go down and the rouble goes up,” they added.

The central bank is widely seen hiking the key interest rate by 100 basis points to 20%, according to a majority of analysts polled by Reuters.

The rouble’s official exchange rate has fallen 13% against the dollar since Aug. 6, when the Ukrainian army’s incursion into Russia’s Kursk region triggered a slide against all major currencies, including the yuan.

Western sanctions imposed on the Moscow Stock Exchange (MOEX) and its clearing agent, the National Clearing Centre, on June 12 stopped all trade in dollars and euros at MOEX, making the yuan the most-traded foreign currency in Russia.

Trade in dollars and euros has shifted to the over-the-counter (OTC) market, obscuring price data. One-day rouble-dollar futures, which trade on the Moscow exchange and are a guide for OTC market rates, were flat at 96.42.

Russian rouble mostly unchanged against US dollar

The central bank’s official exchange rate, which it calculates using OTC data, was set at 96.64 to the dollar.

The rouble weakened 1.1% to 104.52 against the euro, LSEG data showed.

Brent crude oil, a global benchmark for Russia’s main export, was up 1.44% at $76.04 a barrel as Middle East tensions kept the market on edge ahead of the US presidential election.