UPDATE 3-Central banks act as Russian, Kazakh currencies tumble

* Falling oil hits Russian rouble, Kazakh tenge

* Russian cenbank starts selling FX

* Kazakhstan raises rates to stem currency’s slide

* Russian stock market falls in volatile trade (Adds Kazakh Stock Exchange, updates prices)

By Andrey Ostroukh, Gabrielle Tétrault-Farber and Tamara Vaal

MOSCOW/NUR-SULTAN, March 10 (Reuters) - Russia’s central bank said on Tuesday it would sell foreign currency for the first time in five years after the rouble fell to a four-year low, while Kazakhstan sharply raised its key interest rate to stem a slide in its tenge.

Both currencies have tumbled since a deal on global oil output cuts which the two countries were party to unexpectedly fell apart last week, hammering oil prices.

The Russian central bank’s announcement helped the rouble pare losses, though it remains one of the worst-performing currencies against the dollar this year, having lost more than 17% of its value.

The bank did not disclose how much hard currency it would sell.

Kazakhstan, the second biggest oil producer after Russia in the former Soviet Union, hiked its key rate to 12.00% from 9.25% to try to alleviate pressure on the tenge and inflation.

In a sign that local investors were bearish on the tenge, the Kazakh Stock Exchange said there were no buy limit orders for the Finance Ministry’s 19-year treasury bonds in an auction on Tuesday.

At 1308 GMT, the rouble was 4.4% weaker at 71.57 against the dollar and down 5.2% at 81.53 against the euro . At Tuesday’s opening it fell to 72.99 and 85.00 respectively, the weakest rates in around four years.

Russia appears better prepared for market volatility now than in 2014, when Western sanctions and a sharp fall in oil prices forced the monetary authority to hike its key interest rate to 17% from 10.5%.

Including the National Wealth Fund, Russia’s gold and foreign exchange reserves stand at around $570 billion.


The Russian central bank began trying to soothe markets on Monday, a public holiday. It suspended daily purchases of foreign currency for state reserves for 30 days, and said it was ready to use additional instruments to preserve financial stability.

On Tuesday, it said systematically important banks including Sberbank and VTB could temporarily deviate from capital rules amid high market volatility.

In an effort to inject more liquidity into the local market, the central bank also offered a repo auction of 500 billion roubles ($7 billion) and increased the forex swap operation limit to up to $5 billion.

Kirill Tremasov, a former economy ministry official and head of investment at Loko-Invest, said the central bank’s actions “strengthen the idea that today the markets will recover”.

Russian stock indexes fell sharply on Tuesday, pricing in developments in global equity markets since their previous close on Friday.

The dollar-denominated RTS index was down 9.3% at 1,141.3 points, after having fallen to 1,055.31, its lowest since late 2018. The rouble-based MOEX Russian index was 4.5% lower at 2,596.9 points after hitting 2,435.62, its weakest since early 2019.

Shares in Rosneft, Russia’s largest oil producer, and No.2 rival Lukoil were both down around 13%.

For Russian equities guide see

For Russian treasury bonds see

For graphic on currencies vs dollar: here (Additional reporting by Maria Kiselyova and Alexander Marrow in Moscow, Olzhas Auyezov in Almaty; Writing by Andrey Ostroukh and Gabrielle Tétrault-Farber; Editing by Katya Golubkova, Andrew Osborn, John Stonestreet and Jan Harvey)