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RUB: holding ground


Yesterday, RUB saw marked pressure in the morning as USDRUB soared to 58.60. It is fair to say that the EURUSD slump fuelled this spike to a certain extent, though RUB slipped 1.1% against the BASKET during the first trading hours. However, later in the session RUB pared the earlier losses as the crude oil market recovered, while the payment of corporate profit tax weighed on the money market rates, pushing them up to the CBR’s offer on the FX swap market. In the end, Brent ended 0.8% in black at USD 54.8/bbl, but RUB firmed 0.6% against USD to end at 57.51.

Trading remained subdued, with the MICEX reporting total turnover in USDRUB of around USD 3.3bn. In our view, this means that in terms of positioning, exporters still outweigh in the market because long positions which have already been accumulated restrain the bid for USDRUB from international accounts, in particular, while the local bid remains subdued. Meanwhile, the EM FX index closed a tad weaker vs. USD, with ZAR dropping 0.9% countered by a 0.6% BRL rebound. Commodity-backed currencies like NOK, AUD and NZD saw visible pressure, closing 0.5-1.2% in the red.

Separately, yesterday, the CBR saw good demand for FX repo auctions, despite higher offering rates. In particular, banks’ total demand at the one-year auction was USD 1.7bn vs. USD 1.5bn offered. Hence, the whole offering size was allocated at an average of 1.72%. Later, banks borrowed USD 1.6bn at the 28-day auction at an average of 1.19%. Today, the CBR is to conduct a one-week FX repo auction, while banks need to roll over USD 1.6bn raised last week. However, even if they take nothing, the total volume of outstanding FX repo would increase to USD 30.06bn (+USD 965mn).

Maxim Korovin, Tatiana Zueva
VTB Capital analysts


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