(Updates prices, adds Raiffeisen, IMF comment)
By Alexander Marrow
MOSCOW, March 12 (Reuters) - The Russian rouble weakened to more than 75 versus the dollar on Thursday, hitting four-year lows as oil prices plunged and coronavirus fears weighed on investors’ risk appetite, sending stocks down more than 10%.
Government officials sought to assuage fears over the economy following the sharp decline in the price of oil, Russia’s major export, but analysts forecast deeper woes for the rouble should prices fail to pick up soon.
By 1514 GMT, the rouble was 2.6% weaker against the dollar at 74.86, having earlier touched 75.59, its weakest since February 2016. It had also lost 1.3% to trade at 83.22 versus the euro.
Brent crude oil, a global benchmark for Russia’s main export, was down 6.2% to $33.6 a barrel.
The rouble could reach 80 versus the dollar in April based on the current oil price, warned Raiffeisen Bank analyst Denis Poryvay.
The central bank has tried to protect the rouble, starting daily selling of foreign currency from Tuesday. On March 10, it sold the equivalent of 3.6 billion roubles ($48.83 million) in forex, its first such move in five years.
Prime Minister Mikhail Mishustin said the situation in the Russian economy was under the control and that measures by the central bank to contain the fall in the rouble had already started working.
However, former economy ministry official Kirill Tremasov, now head of investment at Loko-Invest, said the central bank’s intervention, which works out at sales of around $1 billion a month, was a “very insignificant volume for the market”.
Tremasov said claims that everything was under control were “inappropriate”, after First Deputy Prime Minister Andrei Belousov said on Wednesday there was no risk of Russia’s gross domestic product (GDP) contracting in 2020.
However, former finance minister and head of Russia’s Audit Chamber Alexei Kudrin said there will be no economic growth with the oil price and rouble at current levels.
Russia has 28 confirmed coronavirus cases, but the International Monetary Fund (IMF) on Thursday warned that avoiding high numbers of cases would not protect countries from economic harm.
“Even if an individual country is fortunate enough to escape widespread viral contagion, the spillover effects from global developments or broken supply chains may still lead to faltering economic activity,” the IMF said.
Russian stock markets tumbled to multi-year lows, with the dollar-denominated RTS index down 11% to 967.4 points, having slid below the psychologically-important level of 1,000 for first time since July 2017.
The rouble-based MOEX Russian index was 7.8% lower at 2,300.9 points, its lowest since December 2018.
For Russian equities guide see
For Russian treasury bonds see
$1 = 73.7300 roubles Additional reporting by Gabrielle Tétrault-Farber, Andrey Ostroukh and Darya Korsunskaya; editing by Angus MacSwan, Barbara Lewis, Kirsten Donovan