RUB: negative reaction to CBR’s policy changes
Yesterday, RUB weakened near 2.6% against USD (44.87) and surrendered around 2.4% vs. BASKET (48.90). Overall, during the day USDRUB traded as high as 45.00. This was in reaction to the news of the CBR’s changes to the FX policy. Meanwhile, the EM FX index lost near 0.6-0.7% vs. USD with ZAR and TRY trading down near 1.0%. Overall, we think the pressure on RUB is now driven first and foremost by domestic clients’ flow, especially, household demand. Hence, it has little to do with the crude oil price swings and the level of interest rates. However, yesterday’s reaction to the CBR’s news looks like an overshoot to us, since now there is no CBR at the market to provide sufficient liquidity amid the one-way trade in USDRUB. At the same time, perhaps some market participants were disappointed that regulator did not announce any ad-hoc material FX interventions to break the negative trend in RUB.
Maxim Korovin, Tatyana Zueva
VTB Capital analyst
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