RUB weakened in line with EM FX
On Friday, RUB marginally weakened against both USD (32.99) and BASKET (38.44). However, RUB slipped only 0.05-0.1%, which was still better than the average performance of EM FX. Thus, on average EM FX weakened 0.3% against USD, with TRY down almost 1.0%, while BRL declined near 1.3%. Overall, last week RUB materially outperformed EM peers: hence, on average EM FX lost near 1.0% to USD, while RUB weakened only 0.4%. Thus, RUB's performance was more correlated with the swings in other commodity-based currencies like NOK, AUD and NZD. Also, exporters were actively selling hard currency last week, especially near or above the 33.00 level in USDRUB, so the latter proved to be a strong resistance level. Friday was no exception - export sold a decent size. Looking forward, we think RUB might well continue to outperform EM peers, while 1Q14 is likely to be supportive thanks to a seasonally strong C/A.
Maxim Korovin, Anton Nikitin
VTB Capital analyst
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