Ruble Advances for Second Day on Bets Exporters Selling Revenue

The ruble rallied past 55 per dollar on speculation exporters are responding to government pressure to sell foreign exchange and as a tax-payment deadline spurs demand for the local currency.

The ruble strengthened as much as 7.6 percent to 54.109 a dollar before trading at 55.7720 as of 2:15 p.m. in New York. The yield on 10-year government bonds fell 49 basis points to 13.1 percent, while the dollar-denominated RTS Index jumped the most among benchmark equity gauges monitored by Bloomberg globally.

The government is appealing to state-controlled exporters to help limit the ruble’s tumble, with President Vladimir Putin asking business leaders in a meeting on Dec. 19 to inform the central bank of their plans to sell foreign exchange, according to a report in the Vedomosti newspaper. Corporate tax payments that Bank of America Corp. estimates will amount to 500 billion rubles ($8.8 billion) are bolstering the ruble as last week’s interest-rate increase keeps squeezing money-market funding.

“All the measures announced and taken by the central bank are starting to have a positive impact,” Dmitry Savchenko, an analyst at Nordea Bank AB in Moscow, said by phone. “Exporters have started selling FX under pressure from the central bank and the government. Finally, the money-market situation is supportive for the ruble.”

Putin asked business leaders, including executives of exporting companies, to conduct “responsible” currency-trading policy, Vedomosti said, citing an unidentified person close to one attendee. The president follows policy makers including Finance Minister Anton Siluanov in turning to exporters to convert more of their foreign revenue into rubles amid efforts to recover from the nation’s worst currency crisis since 1998.

Exporter Sales

OAO Gazprom needs rubles for investments and understands that these actions help stabilize the exchange rate, Deputy Chief Executive Officer Alexander Medvedev told reporters in Moscow today.

The ruble has rebounded 42 percent since tumbling to a record-low 80.10 a dollar on Dec. 16, driven in part by the cash crunch that developed after the Bank of Russia boosted its key interest rate to 17 percent from 10.5 percent that day. The rate banks charge each other for overnight funds fell for a second day to 24.6 percent after touching 27.3 percent, the highest in at least eight years, on Dec. 18.

“A crucial change from early last week has been the return of two-way flow, as exporters are now selling FX,” analysts at Sberbank CIB, the investment arm of Russia’s largest bank, said in an e-mailed report.

Bullish Wagers

Hedge funds and other speculators had a net-long position on the ruble in the week ended Dec. 16, the first week of bullish bets since July, according to data provided by the Washington-based Commodity Futures Trading Commission. The 2,587-contract net long position compared with 2,558 net short positions the previous week. Net shorts peaked at 6,192 in the week ended Nov. 4, the most since at least February 2009, data from the CFTC showed.

Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.

This week’s tax deadline is also generating demand for rubles, according to Vladimir Osakovskiy, the chief economist for Russia at Bank of America in Moscow. Oil, which along with natural gas accounts for 50 percent of Russia’s budget revenue, slid 2.1 percent to $60.08 a barrel in London.

“Our official forecast is still 48 rubles per dollar by the end of the year and we still stand by it,” Osakovskiy said by e-mail. “There are clearly plenty of risks, including potential for escalation of the Ukraine crisis, the risk of capital controls, further oil price moves.”

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