April 26, 2019 / 7:31 AM / a month ago

Russian rouble flat ahead of c.bank key rate decision

MOSCOW, April 26 (Reuters) - The Russian rouble was flat against the dollar in early trade on Friday ahead of a central bank board meeting where it is broadly expected to hold the key interest rate unchanged.

At 0710 GMT, the rouble was unchanged against the dollar at 64.70, having moved away from its weakest level since early April of 64.98 it hit the day before. Versus the euro, the rouble lost 0.17 percent to 72.09.

Analysts polled by Reuters this month unanimously expect the central bank to keep the rate unchanged at 7.75 percent for a third consecutive board meeting.

A third hold this year will have little impact on the Russian currency, they say.

“In Russia, the CBR is to decide on rates today and we believe is likely to keep rates unchanged and only slightly tweak its rhetoric to the dovish side,” VTB Capital Research said in a note. “In that case, its impact on the rouble dynamic would likely be small, in our view.”

The central bank is now expected to trim rates later this year as inflation has already peaked at around 5.3 percent and is projected to head towards its 4 percent target.

Month-end taxes, which usually prompt export-focused companies to convert their foreign currency to meet local duties and thereby support the rouble, were paid earlier this week and no longer have an effect on the currency.

Oil prices, one of the main drivers for Russian markets, declined slightly from 2019 highs on expectations that OPEC will soon increase output to make up for a drop in exports from Iran.

The dollar-denominated RTS index was down 0.1 percent to 1,244.46 points. The rouble-based MOEX Russian index was 0.2 percent lower at 2,556.43 points.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Gabrielle Tétrault-Farber Editing by Gareth Jones

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