Russian rouble nears 80 to the dollar ahead of expected key rate cut

MOSCOW, July 24 (Reuters) - The Russian rouble weakened on Thursday, a day before the central bank is expected to cut interest rates, and approached the 80 to the dollar mark for the first time since June 12.

The rouble was down 1.1% as of 1345 GMT at 78.25 per U.S. dollar, according to data compiled by LSEG based on over-the-counter quotes. The rouble hit 79.6 to the dollar during the session.

The central bank is expected to cut its key rate by 200 basis points to 18% at a meeting on Friday, amid falling inflation, an economic slowdown and the strength of the rouble, according to a Reuters poll of 27 economists this week.

The first weekly deflation since September 2024, recorded in the latest week, bolstered market expectations for the rate cut.

According to a dealer at a major Russian bank, demand for foreign currency is gradually increasing due to seasonal factors and expectations for multiple rate cuts by the central bank.

As a result, importers may gradually increase purchases of foreign currency at current low exchange rates, anticipating a rise in consumer demand for imported goods as credit conditions ease, the dealer said.

The Russian rouble has rallied by 45% against the U.S. dollar since the start of the year, making it one of the world’s best-performing currencies.

Against the Chinese yuan, the most traded foreign currency in Russia, the rouble weakened by 0.9% to 11.04 on Thursday.