September 6, 2019 / 11:12 AM / 3 months ago

UPDATE 1-Rouble extends gains after Russian c.bank cuts rate to 7%

(Updates prices, adds detail)

MOSCOW, Sept 6 (Reuters) - The Russian rouble extended gains on Friday after the central bank cut its key interest rate by 25 basis points to 7.00%, in line with market expectations.

At 1041 GMT, the rouble was 0.4% stronger against the dollar at 65.93, after hovering around 66 in early trade.

Against the euro, the rouble gained 0.6% to 72.65 , the highest since mid-August.

Having lowered the rate for the third time so far this year, the central bank said it will consider the necessity of further rate cuts at one of the upcoming meetings.

Central Bank Governor Elvira Nabiullina will elaborate on the central bank’s monetary policy at a news conference at 1200 GMT.

Central Bank move has pushed yields of 10-year OFZ bonds to 6.99% RU10YT=RR, their lowest since March 2018. Bond yields move inversely with their prices.

On Friday, investors will also closely watch the publication of U.S. monthly payroll data and focus on the Federal Reserve Chairman Jerome Powell, who is due to deliver a speech entitled “Economic Outlook and Monetary Policy” at an event hosted by the Swiss Institute of International Studies, in Zurich.

Stock indexes inched lower. The dollar-denominated RTS index was down 0.3% to 1,334 points. The rouble-based MOEX Russian index shed 0.6% to 2,791 points.

Shares in Surgutneftegaz, Russia’s fourth-biggest oil producer, underperformed by falling 2% the day after its chief executive Vladimir Bogdanov said a recent spike in the company’s shares was due to speculative trading.

For Russian equities guide see

For Russian treasury bonds see (Reporting by Anna Rzhevkina; editing by Andrey Ostroukh, Editing by William Maclean)

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