The CBR’s decision on FX interventions spooked the market yesterday, with USDRUB hiking to 50.60 as soon as the news hit the wires. Within a short time, USDRUB returned to 50.00, consolidating at this level amid a fragile oil recovery and the gradual increase of export selling flows (MICEX turnover picked up to USD 4.1bn, yesterday). At the close, RUB was quoted at 50.07 (-1.5%), while Brent was trading at USD 65.7/bbl, almost flat to the previous day. The EM FX universe remained in good shape, with the EM FX index up 0.7%. TRY remained in the lead (+1.5%), accompanied by BRL (+1.5%) and MXN (+1.1%). On the contrary, commodity-based currencies traded mixed: AUD declined 0.4% against USD, while NOK and NZD firmed 0.2%.
Regarding the outlook for the FX market, we believe that the tax factor will provide support for RUB. The CBR's FX interventions would play a marginal role in the FX market due to the relatively small size. However, sentiment wise it creates a somewhat negatively skewed basis for RUB, limiting the potential upside, we think. Besides, we suppose that pressure on RUB might mount due to other factors: the looming increase in external debt redemptions, dividend payments and seasonally higher demand for FX from the population.