May 7, 2018 / 10:25 AM / a year ago

UPDATE 1-Rouble weaker on state FX buying, new government uncertainty

* Rouble weakens as Putin sworn in for six-year stint

* Uncertainty over new government appointment in focus

* Finance ministry to raise FX buying by 34 pct this month

* Market remains thin amid Russia’s May holidays (Adds detail, quotes, updates prices)

By Andrey Ostroukh

MOSCOW, May 7 (Reuters) - The Russian rouble extended losses in thin trade on Monday after Vladimir Putin’s inauguration for a six-year presidential term that will be followed by the appointment of a new government later this week.

Putin was sworn in for another term, buoyed by popular support but weighed down by a costly confrontation with the West, a fragile economy and uncertainty about what happens when his term ends.

The make-up of the new government is one of the key uncertainties that still hang over the market. Whoever Putin puts forward as prime minister, the decision is widely expected to be supported by Russia’s parliament.

“The market is pricing in the appointment of strong economists for the key roles,” Alor Brokerage said.

The rouble shed 0.6 percent to 62.88 against the dollar as of 0951 GMT and eased 0.3 percent to trade at 74.98 versus the euro.

The finance ministry put pressure on the rouble, announcing a 34 percent increase in the amount of foreign currency it plans to purchase on the Moscow Exchange over the next month.

“The rouble is weakening after an excessive strengthening last Friday,” a dealer at a major Russian bank in Moscow said.

“The market is thin, half of the dealers are away,” he said, referring to Russia’s so-called May holidays that usually see people taking holidays in the first half of the month.

Prices for oil, Russia’s key export, had a positive impact on the Russian market. Brent crude oil, a global benchmark, was up 0.9 percent at $75.53 a barrel.

Higher oil pushed Russian stock indexes higher.

The dollar-denominated RTS index was up 1.0 percent to 1,157.5 points, while its rouble-based peer MOEX rose 0.9 percent to 2,310.6 points.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Andrey Ostroukh and Vladimir Abramov Editing by Alexander Smith

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