The ruble extended its longest winning streak against the dollar since March 2008 as companies and banks sought rubles to pay about $43 billion in taxes and Finance Ministry loans.
The Russian currency appreciated 0.5 percent to 30.70 as of 3:35 p.m. in Moscow, its best intraday level since Dec. 02. Investors pared bets the ruble would weaken, with non- deliverable forwards showing the currency at 31.1205 per dollar in three months, compared with expectations of 31.1955 yesterday.
Banks are due to repay a total 725 billion rubles ($24 billion) of loans from the Finance Ministry in January, 21 percent more than the monthly average of 598 billion rubles in the fourth quarter, data on the ministry’s website show. Companies face as much as 600 billion rubles of taxes this week, boosting demand for the ruble as revenues in other currencies are converted to pay the government, according to VTB Capital estimates.
“There’s strong demand from local banks facing redemptions of Finance Ministry deposits and tax payments,” Mikhail Nikitin, a Moscow-based analyst at Renaissance Capital, said by e-mail. “They just need rubles given the current liquidity situation.”
Renaissance forecasts the ruble to weaken as much as 4.1 percent to 32 per dollar by the end of this quarter, the brokerage said in an e-mailed research note today.
The overnight MosPrime (MOSKON) rate banks say they charge to lend to each other in rubles jumped 57 basis points to 5.85 percent today, the biggest rise since Sept. 15, according to data compiled by Bloomberg. Russia’s central bank provided lenders with 28.1 billion rubles in a repurchase auction today to ease the cash squeeze, according to a statement on its website.
Demand at the auction was almost six times higher at 168 billion rubles, the regulator wrote in the statement.
Russia’s $3.5 billion of bonds due 2020 rose, pushing the yield down seven basis points, or 0.07 percentage point, to 4.397 percent. Dollar bonds due in 2015 rose for an eighth day, lowering the yield six basis points to 3.015 percent.
The ruble added 0.5 percent to 39.81 against the euro and 0.5 percent versus the central bank’s euro-dollar basket to 34.8133, the strongest on a closing basis since Sept. 2.
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