The ruble slid to a five-week low as the central bank suspended some foreign-exchange auctions, stepping up measures to counter this year’s biggest currency rally.
The ruble weakened 1.7 percent to 53.23 against the dollar at 5:36 p.m. in Moscow. It fell 1.2 percent last month, trimming this year’s advance to 14 percent.
Bank of Russia suspended the sale of one-year foreign-currency repurchase agreements on Monday continuing a policy of restricting access to instruments that can be used to reinvest in higher-yielding ruble assets. The central bank is having some success in suppressing the ruble after its first-quarter rally outstripped the rise in crude, threatening to worsen Russia’s budget deficit.
Finance Minister Anton Siluanov said on Friday that currency purchases, which the central bank began last month, show policy makers see the real ruble rate as balanced.
“The central bank wants to push investors towards buying dollars on the market,” Artem Roschin, a dealer at Aljba Alliance bank, said by phone.
“The ruble will weaken on this, which is what the central bank wants.”
The central bank said it bought $200 million on May 28, according to the latest available data, taking purchases since May 13 to $2.33 billion.
Russia’s Treasury also canceled a $500 million deposit auction today, according to its website. A weaker ruble helps the budget because it boosts local-currency revenue from exports.
The price of Brent crude, the benchmark for Russia’s biggest export, was the equivalent of 3,463 rubles a barrel on Monday, the highest since March 12.
Foreign Debt
Russia’s currency may face further downward pressure this month as Russian companies prepare to pay as much as $10.2 billion of foreign debt in June, more than double last month’s level, according to central bank data.
Three interest-rate cuts totaling 450 basis points and a rebound in the ruble have helped drive demand for ruble bonds this year. Policy makers will probably lower the key rate by at least 100 basis points on June 15, according to the median estimate of 19 economists surveyed by Bloomberg, as they unwind an emergency increase to 17 percent in December.
Russia’s five-year government notes fell today, pushing the yield six basis points higher to 10.98 percent. Oil was little changed at $65.52 a barrel in London after losing 1.8 percent in May. Russia’s May manufacturing purchasing managers’ index fell more than estimated to 47.6 from 48.9 in April, data showed on Monday.
The Micex Index of equities added 1.7 percent after losing 4.7 percent in May. The dollar-denominated RTS Index was little changed fell 0.2 percent.
The suspension of repos is “reasonable” given there isn’t a long-term need for foreign exchange, Tom Levinson, the chief strategist for foreign currency and interest rates at Sberbank CIB, the investment unit of Russia’s largest lender, said by e-mail.
“There is a good chance that it is reopened later in the year when external redemption obligations pick up.”
bloomberg.com
The ruble weakened 1.7 percent to 53.23 against the dollar at 5:36 p.m. in Moscow. It fell 1.2 percent last month, trimming this year’s advance to 14 percent.
Bank of Russia suspended the sale of one-year foreign-currency repurchase agreements on Monday continuing a policy of restricting access to instruments that can be used to reinvest in higher-yielding ruble assets. The central bank is having some success in suppressing the ruble after its first-quarter rally outstripped the rise in crude, threatening to worsen Russia’s budget deficit.
Finance Minister Anton Siluanov said on Friday that currency purchases, which the central bank began last month, show policy makers see the real ruble rate as balanced.
“The central bank wants to push investors towards buying dollars on the market,” Artem Roschin, a dealer at Aljba Alliance bank, said by phone.
“The ruble will weaken on this, which is what the central bank wants.”
The central bank said it bought $200 million on May 28, according to the latest available data, taking purchases since May 13 to $2.33 billion.
Russia’s Treasury also canceled a $500 million deposit auction today, according to its website. A weaker ruble helps the budget because it boosts local-currency revenue from exports.
The price of Brent crude, the benchmark for Russia’s biggest export, was the equivalent of 3,463 rubles a barrel on Monday, the highest since March 12.
Foreign Debt
Russia’s currency may face further downward pressure this month as Russian companies prepare to pay as much as $10.2 billion of foreign debt in June, more than double last month’s level, according to central bank data.
Three interest-rate cuts totaling 450 basis points and a rebound in the ruble have helped drive demand for ruble bonds this year. Policy makers will probably lower the key rate by at least 100 basis points on June 15, according to the median estimate of 19 economists surveyed by Bloomberg, as they unwind an emergency increase to 17 percent in December.
Russia’s five-year government notes fell today, pushing the yield six basis points higher to 10.98 percent. Oil was little changed at $65.52 a barrel in London after losing 1.8 percent in May. Russia’s May manufacturing purchasing managers’ index fell more than estimated to 47.6 from 48.9 in April, data showed on Monday.
The Micex Index of equities added 1.7 percent after losing 4.7 percent in May. The dollar-denominated RTS Index was little changed fell 0.2 percent.
The suspension of repos is “reasonable” given there isn’t a long-term need for foreign exchange, Tom Levinson, the chief strategist for foreign currency and interest rates at Sberbank CIB, the investment unit of Russia’s largest lender, said by e-mail.
“There is a good chance that it is reopened later in the year when external redemption obligations pick up.”
bloomberg.com
No comments:
Post a Comment