Ruble Rises Third Day to Dollar as Monthly Taxes Stoke Demand

The ruble rose for a third day against the dollar as monthly tax payments boosted demand for the Russian currency.

The ruble climbed 0.1 percent to 30.2100 per dollar by 11:11 a.m. in Moscow. It was little changed at 40.2100 against the euro and increased 0.1 percent against Bank Rossii’s target dollar-euro basket to 34.7148.

Demand for ruble liquidity from corporate taxpayers and banks will lead to further strengthening in the coming weeks, according to VTB Capital. The MosPrime interbank overnight lending rate rose 13 basis points yesterday to 5.88 percent, the highest level since Jan. 9. Demand for rubles at yesterday’s central bank repo auctions was strong, ING Bank NV analyst Dmitry Polevoy said.

Interest rates will rise to 6 percent and higher by the end of this week and start of the next week,” Polevoy said in an e-mailed note.

Crude oil, Russia’s biggest export, declined by 0.1 percent in New York to $96.56 per barrel. The JPMorgan Emerging Markets Local Currencies Index declined 0.1 percent to 390.557 yesterday.

VTB Capital sees additional support for the ruble from foreign investors once the government’s local-currency bonds, known as OFZs, can be settled through international systems such as Euroclear Bank SA and Clearstream International SA.

“We expect some additional inflows to the OFZ market once Euroclear becomes operational, which we still expect to happen by the end of January,” VTB Capital analysts wrote in the e- mailed note.

Euroclear and Russia’s markets watchdog are discussing the details of local bond market legislation.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.