March 20, 2020 / 1:54 PM / 12 days ago

UPDATE 2-Rouble slides as oil falls and Russia keeps key rate unchanged

(Adds detail, quotes, updates prices)

By Alexander Marrow

MOSCOW, March 20 (Reuters) - The Russian rouble lost ground in volatile trading on Friday after oil prices fell and the central bank opted to leave its key rate unchanged at 6%.

The double hit from the slump in oil prices and a fast-developing global health crisis has made the rouble the worst-performing currency against the dollar this year here; it has lost more than 20% of its value since late 2019.

By 1337 GMT, the rouble was 0.3% weaker against the dollar at 79.38, after strengthening to 77.41 earlier in the day, and had lost 0.4% to trade at 85.02 against the euro .

Brent crude oil, a global benchmark for Russia’s main export, supported the rouble by rising above $30 a barrel earlier in the day, but slipped back to last trade down 1.3% at $28.1.

The central bank kept its key rate unchanged on Friday, in line with a Reuters poll, ending its rate-cutting cycle, and said negative external factors had tightened monetary policy conditions.

Governor Elvira Nabiullina said there was no level or “psychological trigger” at which the central bank would take action to influence the rouble rate, adding its primary task was to engender stable financial conditions.

She said the spread of coronavirus and the situation on global markets had forced the bank to alter its inflation and growth forecasts, but said yearly gross domestic product (GDP) growth was likely to remain positive.

The bank announced temporary measures to support the economy and financial markets amid the coronavirus outbreak and low oil prices, which have caused a rapid slide in the rouble from around 64 against the dollar seen just a month ago.

“This gives the market some certainty, and hopefully rates will stabilise on the money market,” said Ivan Baranov, head of treasury at the Credit Bank of Moscow.

In the past two weeks, the central bank has sought to support the rouble through foreign currency purchases, its first such intervention in five years, and repo auctions to inject liquidity.

Kremlin spokesman Dmitry Peskov on Friday said measures were being taken by the regulator and government to stabilise the rouble.

Russian stock indexes were up.

The dollar-denominated RTS index was up 3.3% to 932.6 points. The rouble-based MOEX Russian index was 3.2% higher at 2348.1 points.

For Russian equities guide see

For Russian treasury bonds see

Reporting by Alexander Marrow; additional reporting by Andrey Ostroukh and Tom Balmforth, Editing by Louise Heavens and Mark Potter

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