Russian rouble flat vs US dollar as central bank flags more rate cuts
The Russian rouble traded flat against the U.S. dollar and the Chinese yuan on Monday as a senior central bank official flagged more key interest rate cuts at a meeting on July 25.
By 1140 GMT, the rouble traded at 78.50 per U.S. dollar, according to LSEG data based on over-the-counter quotes. The Russian currency is up by about 45% against the dollar since the start of the year.
The central bank's Deputy Governor Alexei Zabotkin said on Monday that the board may consider an interest rate cut of more than 1 percentage point at its meeting on July 25 if data confirms that inflation is on track to slow to 4% in 2026.
The stronger rouble has helped the central bank bring the inflation rate down in recent weeks by making imported goods cheaper, but most analysts now say that the rouble is overvalued.
Zabotkin told reporters that the rouble's exchange rate will remain on a trajectory consistent with inflation returning to the central bank's target of 4% in 2026, down from the current level of just under 10%.
Further rate cuts by the central bank are expected to weaken the rouble. Against the Chinese yuan, the most traded foreign currency in Russia, the rouble was also flat on Monday at 10.92 per yuan on the Moscow Stock Exchange.
(Additional reporting by Elena Fabrichnaya in St.Petersburg, writing by Gleb Bryanski; Editing by Susan Fenton)
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