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Rouble steady in Asia after Russia measures to halt collapse

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The rouble recovered in Asia on Thursday after Russian authorities launched fresh measures to halt its collapse, while the Federal Reserve's indication that interest rates will not rise until mid-2015 supported the dollar.

[TOKYO] The rouble recovered in Asia on Thursday after Russian authorities launched fresh measures to halt its collapse, while the Federal Reserve's indication that interest rates will not rise until mid-2015 supported the dollar.

The struggling Russian unit was at 61.20 to the dollar after plunging to 80 earlier in the week, and at 74.92 against the euro after previously hitting 100.

Moscow said Wednesday it would sell about US$7 billion in foreign reserves to prop up its currency and also implement other measures to prevent a sell-off. That came after a central bank interest rate hike to 17 per cent from 10.5 per cent failed to halt a slide.

The rouble has been hammered by a perfect storm as slumping oil prices hit Russian exports combine with punitive sanctions for Moscow's support of separatists in eastern Ukraine.

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In other trading, the dollar surged to 118.99 yen in the morning Thursday before easing back to 118.56 yen later. That is down slightly from 118.63 yen in New York, but still well up from 117.07 yen in Tokyo earlier on Wednesday.

The euro fetched US$1.2347 compared with US$1.2343, while it was also at 146.35 yen against 146.43 yen in US trade.

The greenback rallied on Wednesday after the US Federal Reserve signalled no shift in its expectation to raise interest rates in 2015.

Its policy committee said it "judges that it can be patient in beginning to normalise the stance of monetary policy". Rates have been at record lows since 2008, at the height of the global financial crisis.

"Most importantly, (Fed chair Janet Yellen) noted that normalisation is unlikely to begin in the next couple of meetings, which suggests that April is on the table for the first rate rise," National Australia said in a note.

"Yellen also emphasised that a number of participants indicated that lift-off in the middle of 2015 could be appropriate." Credit Agricole added: "Fed officials do not want to send a signal that rate hikes are around the corner... We believe that the Fed will proceed cautiously as we see the risks of tightening too early... are much greater than the risks of tightening too late."

AFP

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