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RUB: correction


Yesterday, RUB weakened near 1.2% against USD to close at 58.19. The re-emergence of downward pressure on EURUSD offered certain support to USD in the Russian FX market, but still RUB slipped near 0.8% against BASKET. As we have pointed out before, hard currency offers from export eased with the end of the tax period, while bids from import strengthened at levels close to 55.0. In addition, the spike in the oil market in the wake of unrest in Yemen proved to be temporary – specifically, the price of Brent oil declined 2.7% yesterday to USD 53.3/bbl. Thus, some downward correction in RUB does not come as a surprise. Meanwhile, the EM FX index ended about 0.2-0.3% in the black with ZAR and TRY up 0.2% and 0.4%, respectively, whilst BRL rallied 1.0%. However, commodity-backed currencies remained under pressure for the second day in a row: NOK lost 0.6% yesterday and AUD with NZD slipped 0.4-0.6%.

Separately, we highlight that the CBR held a one-week FX repo auction for USD 2.0bn, yesterday. Total demand was USD 884mn vs. USD 1.57bn last week. The average rate printed at 1.25%, up from 0.70% in the previous auction. Overall, the total debt of banks to the CBR under the FX repo facility is to reach USD 30.9bn today (+USD 1.8bn for the week).

Maxim Korovin, Tatiana Zueva
VTB Capital analysts

ruble, FX market

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