The ruble snapped eight days of losses, rebounding from the lowest level in almost four years, as Bank Rossii stepped up interventions to curb currency swings.
The ruble strengthened 0.1 percent to 37.8193 against the dollar-euro basket by 6 p.m., when the regulator stops its trading activity. The local currency advanced 0.3 percent to 43.7255 against the euro and was little changed at 32.9885 versus the dollar. The yield on benchmark OFZ bonds due February 2027 declined five basis points, or 0.05 percentage point, to 7.77 percent.
The central bank, which reports foreign-exchange interventions with a lag, spent the equivalent of 7.57 billion rubles ($230 million) in foreign currency on July 30 buying rubles, compared with about $200 million daily since July 8. Oil, Russia’s main export earner, increased 1.2 percent percent in London to $109.02 per barrel after better-than-expected Chinese data.
“The ruble is strengthening against the basket in response to increased foreign-currency selling by the central bank and a correctional mood on global markets, including oil,” Anton Zakharov, money manager at OAO Promsvyazbank, said in e-mailed comments.
A Chinese government gauge of purchasing managers rose to 50.3 in July, compared with a median 49.8 estimate in a Bloomberg survey. The U.S. Federal Reserve pledged yesterday to maintain its bond buying program amid persistently low inflation.
The Russian central bank sold $4.18 billion of dollars and 376.5 million of euros on the local market in July, the most since October 2011, the regulator said on its website.
The ruble is unlikely to weaken further as the central boosts interventions and oil prices remain high, according to Vladimir Kolychev, a strategist and economist at OAO Rosbank in Moscow.
“There is no cap as such, but it’s much harder for the basket to move higher from here,” Kolychev said by e-mail, adding that at 37.85 rubles to the basket interventions may increase to $400 million per day.
The Russian central bank shifted the band in which it allows the ruble to trade against the target basket on three occasions in July to 31.85-38.85, according to the website. The bank moves the corridor in 5-kopek steps as interventions accumulate.
At a pace of $200 million in daily interventions the corridor shift occurs every eight to nine days, according to Dmitry Polevoy, economist at ING Groep in Moscow.