JOIN USRouble pares heavy losses in Moscow but falls outside Russia
The rouble pared some of the previous day's heavy losses early on Tuesday, firming in local trading to hover above its record low but remained under pressure on foreign markets from harsh Western sanctions.
The currency found some support after Russian authorities ordered exporting companies, among which are some of the world's biggest energy producers from Gazprom to Rosneft, to sell 80% of their forex revenues on the market, as the central bank's own ability to intervene on currency markets was curbed.
The Russian currency had gained 3.3% to 91.49 against the dollar by 0807 GMT in Moscow, and had added 3.4% to 102.40 versus the euro.
Promsvyazbank said they expected the rouble to hold below 100 to the dollar on Tuesday.
On the EBS electronic trading platform, however, the rouble was at 103 to the greenback, but still a distance from the all-time low of 120 hit on Monday.
The rouble tumbled following the start of Russia's invasion of Ukraine, at one point losing a third of its value, but an emergency rate hike and other urgent measures adopted by the central bank helped it stabilise.
Moscow calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbour's military capabilities and capture what it regards as dangerous nationalists.
The weak rouble is set to hit living stands in Russia and fan already high inflation, while western sanctions are expected to create shortages of essential goods that people in Russia have become used to, such as cars.
The Institute of International Finance (IIF), a trade group representing large banks, also warned that Russia was extremely likely to default on its external debts and its economy will suffer a double-digit contraction this year after the fresh reprisal measures by the West.
The central bank and the finance ministry did not reply to Reuters request for comment on the possibility of defaults.
Share trading on the Moscow Exchange was suspended for a second day after sharp sell-offs hammered the market since mid-February.
"The decision was very effective, as most blue chips are actively used in the REPO market, and a plunge may lead to margin calls," said Ararat Mkrtchian, co-founder of Russian index company Beta FT.
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