Russian rouble surges after symbolic key rate cut

MOSCOW, Oct 24 (Reuters) – The Russian rouble strengthened against the U.S. dollar and China's yuan on Friday after the central bank cut its key interest rate by 50 basis points (bps) and raised inflation forecasts for both this year and 2025. By 1620 GMT, the rouble was up 1.9% at 79.74 against the U.S. dollar in over-the-counter trade, and by almost 2% at 11.15 against the yuan on the Moscow Stock Exchange, where the Chinese unit is the most traded foreign currency. The small cut, which some analysts called "symbolic", and hawkish wording on inflation in the statement supported the rouble, which benefits from high interest rates since keeping money in rouble-denominated assets becomes more attractive. The rouble has been strengthening during the week in the run-up to the central bank's meeting despite new Ukraine-related U.S. sanctions that targeted Russian oil companies Lukoil and Rosneft. Russian Central Bank Governor Elvira Nabiullina told a news conference after the board meeting that shrinking imports and lower demand for foreign currency were the two main factors behind the stronger exchange rate of the rouble. "We must admit that our exchange rate has become more volatile," she said. (Reporting by Gleb Bryanski Editing by Marguerita Choy)

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