UPDATE 2-Rouble tumbles to near 6-year low vs euro, falls vs dollar with U.S. vote in focus

(Updates prices, adds Kremlin comment, c.bank FX sales)

MOSCOW, Nov 2 (Reuters) – The Russian rouble plunged to a near six-year low against the euro on Monday, plagued by falling oil prices, the persistent rise in COVID-19 cases at home and abroad, and uncertainty before Tuesday’s U.S. presidential election.

Asked about the rouble’s drop, a fall of around 23% against the dollar this year, the Kremlin said the central bank was helping to limit volatility and said Russia was reducing its dependence on imports and preserving macroeconomic stability.

By 0916 GMT, the rouble had lost 1.1% to trade at 93.65 versus the euro, earlier hitting 94.1425, its weakest since December 2014.

It was 1.2% weaker against the dollar at 80.45 , reaching levels not seen since March 30, a more than seven-month low, as investors preferred safe-haven assets ahead of the U.S. vote.

“Markets are gearing exclusively to the outcome of the U.S. elections, which is fraught with risk,” BCS Global Markets said in a note, adding that a scenario where incumbent Donald Trump loses but refuses to step down is particularly unfriendly to markets.

Russian markets also see downside pressure from expectations that Democratic candidate Joe Biden could win the election, which may result in new sanctions against Russia, analysts said.

“Psychological marks are being breached, but the magnitude of this volatility is minimised by the regulator’s efforts,” Kremlin spokesman Dmitry Peskov on Monday.

Foreign currency intervention by the central bank has given the rouble some support throughout the COVID-19 crisis.

The bank, which reports its foreign currency sales with a two-day lag, said it sold 10 billion roubles ($124.4 million) worth of forex last Thursday.

Russia recorded more than 18,000 new coronavirus cases on Monday and 238 deaths, but authorities have so far played down the need for a return to heavy health restrictions.

Rising case numbers elsewhere and tighter restrictions, such as the promise of a new lockdown in the United Kingdom, added to pressure on riskier assets.

“Soaring COVID-19 infection rates, with Europe and the U.S. continuing to set records highs, raise concerns over the global growth outlook and crude prices are tumbling this morning on worries over demand,” Alfa Bank said in a note.

Brent crude oil, a global benchmark for Russia’s main export, was down 2.2% at $37.10 a barrel, exerting pressure on Russian stock indexes.

The dollar-denominated RTS index was down 0.7% to 1,059.6 points, earlier touching a more than six-month low. The rouble-based MOEX Russian index was 0.5% up at 2,704.7 points.

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