Rouble hits new lows as U.S. threatens new sanctions

Reuters

The rouble hit further record lows on Monday and Russian shares fell, hurt by investor concern about possible new U.S. sanctions over the Ukraine crisis.

The central bank was probably intervening on Monday, traders said, in what has become nearly a daily action since the start of the month.

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The Russian currency weakened beyond 59 roubles per dollar for the first time. At 1203 GMT it was around 2.3 percent weaker at 59.53 against the dollar and 2.4 percent weaker at 74.04 versus the euro.

A modest recovery in oil prices, whose sharp fall has together with sanctions been the main cause of the rouble's over 45 percent slide against the dollar this year, prevented further losses.

After Russian markets closed last week, the U.S. Congress passed a bill setting out tougher sanctions on Moscow and authorizing the supply of military aid to Ukraine.

U.S. President Barack Obama has yet to sign the bill into law and has said he opposes further sanctions on Russia unless Europe is on board.

The bill "will be negative for market sentiment," analysts at Sberbank CIB investment bank wrote in a note.

Russia's central bank said on Monday it had conducted $478 million worth of forex market interventions on Dec. 11, taking the total the bank has spent defending the currency this month to almost $6 billion.

"The policy response from the Russian authorities has been close to non-existent -- weak, feeble FX intervention, and no appetite to raise policy rates in any meaningful way," Tim Ash, head of emerging markets research at Standard Bank in London, said in a note.

The central bank raised its main lending rate by one percentage point last week, but the move did little to buttress the currency.

Brent crude was trading over 1 percent higher at $62.60 a barrel in afternoon trading in Moscow, offering support for oil which is one of Russia's chief exports.

Russian shares slipped, mirroring developments elsewhere in emerging markets.

The dollar-based RTS index was 3.4 percent lower at 771 points but the rouble-traded MICEX was up 0.1 percent at 1,460 points.

Russian dollar bond spreads crossed the 600 basis-point level, while debt insurance costs touched 500 basis points, according to Markit.

For rouble poll data see

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For Russian treasury bonds see

Russia in graphics: http://link.reuters.com/dun63s