The Russian rouble extended its losses today after plunging the previous session as the central bank slashed interest rates, signalling more cuts to come.
The prospect of easing capital controls and a possible sovereign default was also hammering the currency.
The rouble had slumped around 10% to the dollar and euro yesterday as Russia's central bank cut its key rate to 11%, the third 300-basis-point cut in a row, as inflation slows from more than 20-year highs.
The rouble was 2.1% weaker against the dollar at 66.63 this morning to hit a more than two-week low. On Wednesday, the rouble had hit its strongest level since February 2018 of 55.80 against the greenback.
Against the euro, the rouble lost 4.4% to trade at 70.99, tumbling further away from the seven-year high of 57.10 hit on Wednesday.
Propped up by capital controls, the rouble had artificially risen to become the world's best-performing currency so far this year. New gas payment terms requiring conversion of foreign currency into roubles and a fall in imports have also helped.
But it has now lost the support of the month-end tax period that usually sees export-focused companies convert foreign currency into roubles to pay local liabilities.
Economy Minister Maxim Reshetnikov said the currency's strength, which has raised concerns about the negative impact on Russia's budget revenue from exports, was making Russian goods uncompetitive abroad.
He expects the mandatory proportion of foreign currency revenue that exporters must convert into roubles to be cut further from 50%.
Market eyes are focused on Russia's National Settlement Depository (NSD), which has promised to make interest payments on Friday worth $71.25m and €26.5m on two Eurobonds.
That is in spite of Washington deciding against extending a key licence that had allowed Moscow to keep paying bondholders despite the sanctions imposed over its actions in Ukraine.
