Yesterday, the Russian FX market had a strong session, though liquidity remained poor, with MICEX volume turnover amounting to only USD 2.7bn. RUB opened flat, but continued on a stronger footing amid a surge in oil prices. At the end of the day, RUB closed at 49.97 against USD, having firmed 1.9% from Friday’s levels. In the meantime, Brent advanced to USD 66.3/bbl, posting rather volatile dynamics during the session. EM currencies continued to recover, with the EM FX index firming another 0.4% against USD (vs. Monday). TRY and BRL outperformed, adding 1.1-1.4%. Meanwhile, Asian currencies were on a softer footing: INR fell 0.5%, followed by IDR and KRW, which weakened 0.4% and 0.3%, respectively. The stronger oil market supported commodity-based currencies: NOK and AUD gained 1.1%, and NZD rose 0.4%.
Yesterday, the CBR offered only USD 100mn at the one-week FX repo auction, but even this was more than enough to cover demand: the regulator placed only USD 71mn at an average rate of 2.26%. In turn, the Treasury FX deposit auction failed to find any bids, so it was cancelled, despite the favourable 1.2% minimal rate. Separately, the CBR scheduled an FX 312-P auction for Friday, tendering USD 500mn for a 28-day period.