Ruble Rebounds From Steepest Decline in Almost 3 Years on TaxesVladimir Kuznetsov
The ruble climbed, paring a weekly decline spurred by international sanctions and a downed plane in Ukraine, as some exporters bought the currency before a tax deadline.
Russia’s currency strengthened 0.2 percent to 35.1110 per dollar by 6 p.m. in Moscow, paring its decline this week to 2.6 percent, the most since the week ended Jan. 26. The yield on government bonds due February 2027 was unchanged at 9.04 percent, a 33 basis-point advance this week.
Russian companies face about 373 billion rubles ($10.7 billion) in tax payments next week, according to Sberbank CIB. The currency tumbled yesterday the most since September 2011 after the U.S. announced new sanctions against some Russian companies and a Malaysian Airlines jet was shot down over eastern Ukraine.
“Exporters were selling today and some long positions were closed” in foreign currencies, Aram Kazaryan, foreign exchange and interest-rates trader at OAO MDM Bank in Moscow, said by e-mail.
Crude oil, Russia’s main export earner, rose for the third day, climbing as much as 0.7 percent to $108.62 per barrel in London. The ruble added 0.4 percent to 47.42 against the euro and strengthened 0.3 percent versus the central bank’s target basket of dollars and euros to 40.6476.
Russia’s currency is down 6.4 percent against the dollar since the start of the year, the third-worst performance among 24 developing-market currencies.
Foreign investors are already opening new positions, betting on ruble weakness, Kazaryan said.
A further devaluation beyond 36.50 per dollar may prompt the central bank to return to the foreign exchange market, Sberbank CIB analysts led by Tom Levinson said in an e-mailed note. The bank may implement emergency measures before the ruble reaches the level at which it will intervene in the market -- 42.45 against the basket of currencies, the analysts said.
“Renewed sharp ruble depreciation will likely raise the alarm at the central bank,” they said.
The central bank is due to hold its regular interest rate meeting on July 25.