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.
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.
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