UPDATE 1-Rouble tumbles after Germany says Kremlin critic Navalny poisoned with Novichok

(Recasts with German comments on Navalny)

MOSCOW, Sept 2 (Reuters) – The Russian rouble tumbled on Wednesday after a German government spokesman said Kremlin critic Alexei Navalny had been poisoned with a nerve agent of the Novichok family.

The Russian opposition politician has been lying in a coma in a Berlin hospital after a suspected poisoning in Siberia last month. The incident has prompted calls by the West to investigate and could mean more sanctions against Moscow.

After having opened slightly weaker against the U.S. dollar, the rouble tumbled 2.4% against the greenback to 75.30 in reaction to the German comment. Versus the euro the rouble fell 1.5% to 88.93.

Russian prosecutors said last month they saw no need for a criminal investigation into the case because they had found no sign any crime had been committed against Navalny.

Novichok, a deadly group of nerve agents developed by the Soviet military in the 1970s and 1980s, is what Britain believes was used to poison former spy Sergei Skripal and his daughter in the English city of Salisbury two years ago. They survived, but a British woman died after coming into contact with the toxin.

On the local market, Russia’s Finance Ministry sold two series of OFZ treasury bonds worth a combined total of 215.39 billion roubles ($2.87 billion) earlier on Wednesday. It said demand for the bonds, which generally buttresses the rouble, stood at 349.68 billion roubles.

Local investors are also awaiting the finance ministry’s announcement on Thursday of its foreign currency selling plan for the month ahead.

A Reuters survey this week showed the ministry was expected to ease its selling of foreign currency from state reserves to the equivalent of $540 million.

Oil prices extended gains on Wednesday after a bigger-than-expected draw in U.S. crude stockpiles and as strong U.S. and Chinese factory activity fuelled optimism among investors about a recovery from the coronavirus pandemic.

Brent crude oil, a global benchmark for Russia’s main export, dipped 0.4% to $45.35 a barrel by 1400 GMT.

Russian stock indexes were also falling.

The dollar-denominated RTS index was down 2.3% to 1,245.1 points. The rouble-based MOEX Russian index was 0.1% lower at 2,971.5 points.

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