Russian rouble hits lowest point since October against dollar

Rouble hits new low: The Russian rouble slid to its weakest level against the US dollar since late October on Thursday, impacted by a major reduction in the Russian state's foreign currency sales this month.

Russia's finance ministry announced last week that it would more than double its purchases of foreign currency and gold in the coming month. The move, coupled with central bank selling, is expected to bring the state's overall net forex interventions close to zero.

As of 0735 GMT, the rouble was down 0.5 per cent at 93.873 against the dollar, hitting 93.9350 at its lowest, the weakest since October 30 last year.

Against the euro, the rouble fell 0.4 per cent to 100.85, and against the yuan, it dropped 0.4 per cent to 12.93.

Maxim Fedosov, portfolio manager at First Asset Management, attributed the rouble's decline to the reduced volume of foreign currency sales by the central bank and an increase in demand from individuals before the vacation season in early May.

Despite the rouble's weakening, high oil prices and the country's tight monetary policy continue to support the Russian currency. Central Bank Governor Elvira Nabiullina stated on Wednesday that Russia's inflation peak has passed, but the slowdown is not yet sufficient for interest rates to start falling.

Brent crude oil, a key export for Russia, rose 0.1per cent to $90.55 a barrel, further supporting the country's economic outlook.

(with Reuters inputs)