Ruble Climbs as Russia Tax Deadline Spurs Demand From Exporters

The ruble gained for a second day as a rebound in oil and an approaching tax deadline prompted some Russian exporters to sell foreign currency.

The ruble rose 0.8 percent to 46.75 against the dollar at 1:32 p.m. in Moscow. Ten-year government-bond yields fell from a five-year high, declining eight basis points to 10.27 percent. Brent crude gained 0.5 percent to $79.73, after falling as much as 0.6 percent.

Demand for rubles may rise further as Russian companies, including large exporters, are expected to pay as much as 700 billion rubles ($15 billion) in taxes from Nov. 20 to Nov. 28, according to OAO Bank Zenit. The currency has recovered 4.1 percent from a record intraday low reached on Nov. 7 after the Bank of Russia took steps to allow it to trade more freely and curtail its supply.

“After two months of only mild exporter dollar sales to meet tax payments, there is potential for this to pick up markedly in coming days,” Sberbank CIB analysts Tom Levinson, Vladimir Pantyushin and Iskander Abdullaev said in an e-mailed note. “Corporates may judge this the time to take advantage of a high, but slightly more stable, dollar-ruble.”

Crude’s decline into a bear market put pressure on Russia’s finances as the world’s largest energy exporter gets half of the state revenue from oil-and-gas industries. U.S. and European Union sanctions over Russia’s role in the Ukraine crisis shut companies out of debt markets, driving a shortage of foreign currency and exacerbating capital outflows.

Watching OPEC

The ruble has lost 30 percent this year, the most after Ukraine’s hryvnia among currencies tracked by Bloomberg worldwide, as its volatility relative to other currencies reached a nine-year high.

“Until next week’s OPEC summit is out of the way, the prospect of sizable ruble appreciation is limited,” Sberbank analysts said, referring to a meeting of the Organization of the Petroleum Exporting Countries on Nov. 27.

Last week the Bank of Russia abandoned its predictable rules-based interventions, which have drained its reserves by $90 billion since the beginning of the year to $421 billion. The central bank said it reserves the right to intervene without warning if it sees a threat to financial stability.

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