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RUB: behind the curve

 
08.10.2014
Yesterday, RUB lost 0.3% vs. USD (39.95) and near 0.5% vs. BASKET (44.71). On Friday, the CBR sold near USD 980mn and switched the upper end of the BASKET’s operational band to 44.50. Given that the range for the BASKET was moved to 44.60 on Monday, the regulator sold at least USD 420mn. Therefore, judging by the BASKET’s closing level, the CBR might have sold another USD 700mn yesterday. Hence, in total, FX interventions for the last three sessions amounted to USD 2.1bn. On the one hand, pressure on RUB is coming from sliding crude oil prices (Brent lost 1.3% yesterday). However, we also think that a deficit of US dollar liquidity in the Russian interbank market is another important factor weighing on RUB. In particular, banks have also borrowed US dollars from the regulator (see below). Meanwhile, we highlight that the EM FX index has weakened only 0.1% against USD, with ZAR up 0.2%, while BRL advanced another 1.2%.
Maxim Korovin, Tatyana Zueva
VTB Capital analyst

Tags:
ruble, basket

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