The ruble strengthened as companies bought the Russian currency to meet tax deadlines and government officials said they’re comfortable with the exchange rate.
The ruble gained 0.3 percent to 53.844 per dollar by 5:57 p.m. in Moscow, extending last week’s 1.5 percent advance. Options data showed traders increased bullish bets on the currency to the highest level since March in the week ended June 16, according to U.S. Commodity Futures Trading Commission data.
Demand for the ruble will get a boost this week as companies prepare to pay about 543.5 billion rubles ($10 billion) of taxes on June 25, according to Sberbank CIB. After weakening 8.1 percent since mid-May, the currency looks balanced following its “healthy” devaluation, RBC newspaper reported, citing First Deputy Prime Minister Igor Shuvalov. The current ruble rate and oil price are “ideal” for Russia, RIA Novosti quoted Finance Minister Anton Siluanov as saying.
“Tax payments will weigh positively on the ruble this week,” Ivan Tchakarov, an economist at Citigroup Inc. in Moscow and the second-most accurate ruble forecaster in a Bloomberg survey of the past four quarters, said by e-mail on Monday. “The ruble exchange rate will be stable and range around current levels. Everybody seems to be happy with current levels.”
The ruble strengthened last week and bonds fell as the central bank warned about inflationary risks after delivering its smallest rate cut since March. Options traders boosted net long positions in the ruble by 98 percent to 2.184 futures in the week ended June 16, the highest level since March 31, the U.S. data show. The yield on five-year government bonds dropped eight basis points to 11.11 percent after rising 20 basis points last week.
Emerging-market stocks jumped the most nine weeks on Monday and currencies gained on optimism European officials will break a months-long impasse in talks over a Greek bailout. European Union governments extended sanctions against Russia by six months to the end of January, keeping pressure on the Kremlin to bring peace to eastern Ukraine.
Support from taxes may be short-lived, according to Nikolay Zolotarev, the head of the investment department at OAO MDM Bank in Moscow. “The tax payment factor will impact the ruble until the 25th,” he said by e-mail. “If the dollar starts to strengthen, and oil falls, then the ruble will decline despite Shuvalov’s and Siluanov’s comments.”
The ruble trimmed its advance as Brent crude retreated 1.2 percent to $62.28 per barrel. The benchmark Micex stock index gained 0.3 percent to 1,668.34. OAO Mobile TeleSystems and OAO Surgutneftegas advanced, adding 2.9 percent and 1.7 percent, respectively.