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RUB: yet another one percent

 
15.10.2014
Yesterday, RUB weakened 0.9% against both USD (40.87) and the BASKET (45.77). Hence, for the second day in a row RUB suffered a one percent decline. Meanwhile, the EM FX index weakened just 0.1%. Clearly, Brent crude’s slip below the USD 88/bbl level ignited the pressure in RUB, as well as in other commodity-based currencies. In particular, NOK lost 1.5% against US yesterday, while NZD and AUD weakened 0.5%. Overall, RUB’s underperformance vs. the EM FX index has widened to 17.5% YTD. The CBR has shifted the BASKET from 45.35 to 45.75, which implies USD 2.8bn in FX interventions. Hence, the total amount of FX selling in October by the CBR is rapidly approaching USD 10.0bn. As we have argued before, in current form the CBR’s interventions mostly just provide liquidity to the market.
Maxim Korovin, Tatyana Zueva
VTB Capital analyst

Tags:
ruble, basket

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