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Ruble Gains to 2-Month High Versus Dollar Before Tax Payments

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July 14 (Bloomberg) -- The ruble gained for a third day against the dollar to its strongest level in almost two months as an investor said companies acquired the currency to pay taxes.

The Russian currency added 0.4 percent to 30.6000, for its strongest close since May 18 after gaining as much as 0.8 percent earlier today. The yield on Russia’s dollar bonds due 2020 fell 7 basis points to 5.212 percent.

Companies are buying the ruble to make tax payments due after July 15, according to Denis Korshilov, head of foreign-exchange trading at Citigroup Inc.

Investors increased bets that the ruble will weaken, with non-deliverable forwards showing the currency at 30.7985 per dollar in three months compared with an NDF of 30.7830 on July yesterday. The contracts are a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.

The currency weakened 0.3 percent to 38.9060 per euro, leaving it at 34.3377 against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.

The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged January 2009 to defend.

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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