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The Russian rouble is weakening as Putin meets Xi Modi and Xi in China

On Monday, the Russian rouble fell to a new low of one month against the U.S. Dollar as President Vladimir Putin praised an increase in the use of national currencies for trade among members of a security initiative.

Xi Jinping, the Chinese president, hosted more than 20 non-Western leaders, including Russian President Vladimir Putin and Indian Premier Narendra Modi at a Shanghai Cooperation Organisation summit, a China supported initiative.

According to LSEG, the rouble fell 0.8% to 80.57 per dollar at 1320 GMT based on quotes obtained over the counter. It was down 0.1% at 11.25 against the Chinese yuan. The most traded currency in Russia.

China and India are the two largest buyers of Russian crude oil. Their purchases ensure steady inflows in foreign currency which help to support the rouble, despite Western sanctions over Russia's actions in Ukraine.

Maxim Timoshenko, a Russian Standard Bank analyst, said that increased volatility in the rouble was likely due to the uncertainty surrounding the peace negotiations with Ukraine and the prospects of monetary ease.

Analysts believe that the key domestic factors influencing the Russian currency are the central bank's announcement of its key interest rate for the month of September, as well as a forthcoming announcement by the government on the volume and type foreign currency intervention.

A poll predicts that the rouble will weaken by 24% to 100 dollars in the next year. (Reporting and EEditing by Andrew Heavens; Andrew Heavens is the EEditor)

(source: Reuters)