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Russian rouble dips near 10-month low vs US dollar

The Russian rouble struck its weakest mark since late April, hurt by lower foreign currency revenue inflows from hydrocarbon exports and a continued recovery in imports as companies build new supply chains.

At 0726 GMT on Tuesday, the rouble was 0.1 percent weaker against the dollar at 73.88, having hit 73.9850 during the session, its lowest point since April 25.

The Russian currency lost 0.3 percent to trade at 79.26 versus the euro and shed 0.3 percent against the yuan to 10.83 .

The rouble’s weakening from around the 68 mark to the dollar in mid-January to current levels can be explained mainly by foreign exchange market dynamics and imports, Alfa Capital analysts said.

Some Russian exporters have been exempt from having to sell foreign exchange revenues for roubles under inter-government agreements since February 6, in a slight easing of the capital controls that supported the rouble throughout 2022 amid the conflict in Ukraine.

“According to many indirect signs, one can see the recovery of imports due to new supply chains through friendly countries, therefore, demand for foreign currency from importers has increased,” the Alfa Capital analysts said.

The Russian government has been selling 8.9 billion roubles ($120.8 million) of foreign currency per day to plug a budget deficit that has soared because of lower oil and gas revenues.

Expectations for weaker energy revenue were also weighing on the Russian currency after the central bank cut its Urals oil price forecast on Friday. The bank dropped its projected average price for the rest of the year to $55 a barrel, down from its previous forecast of $70.

Brent crude oil, a global benchmark for Russia’s main export, was down 0.5 percent at $86.2 a barrel .

Russian stock indexes were lower.

The dollar-denominated RTS index was down 1 percent to 956.2 points, its weakest mark since Jan. 6. The rouble-based MOEX Russian index was 0.9 percent lower at 2,243.0 points.

READ MORE: Why is Russia gripped by panic buying?

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