Ruble Gains for Fourth Week on Exporter Tax Boost and $45 Crude

  • Brent crude 5.6% stronger than before weekend Doha talks
  • Sberbank CIB sees tax support fading at 66 rubles to dollar

The ruble headed for its fourth week of gains as oil traded above $45 a barrel and conversions by companies to pay local taxes buoyed the Russian currency.

The ruble has extended its rebound from a January low as crude climbed this week even after failed oil-price talks in Doha on Sunday. The currency traded 1 percent stronger at 66.15 per dollar as of 5:41 p.m. in Moscow, taking its weekly appreciation to 0.5 percent. Brent crude gained 2.1 percent to $45.46 a barrel.

Exporters buying rubles to pay their local tax bills in the second half of the month have combined with a resurgent oil price to lift the currency of the world’s biggest energy exporter, according to Sberbank CIB. That’s helped make it the best performer in emerging markets so far this year after Brazil’s real, data compiled by Bloomberg show.

“There has been reasonable support from tax-related conversion for the ruble this week,” Tom Levinson, chief FX and rates strategist at Sberbank CIB in Moscow, said by e-mail.

At the same time, Levinson said uncertainty over the future direction of oil prices had deterred some companies from exchanging their dollars for rubles at a rate stronger than 66. The ruble surged to a November high of 65.1570 per dollar on April 20.

Oil and natural gas account for about a third of Russia’s budget revenue and almost 60 percent of its exports. The 60-day correlation between the ruble and Brent crude reached a record 0.85 on April 15 and traded at 0.81 on Friday. A value of 1 would mean the assets are moving in lockstep.

Government bonds fell with the yield on five-year debt three basis points higher at 9.29 percent. The Micex stock index, which briefly touched an all-time record on Thursday, added 0.6 percent to 1,961, led by gains in Norilsk Nickel PJSC.

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