At the end of the week, liquidity on the market worsened, with the MICEX reporting only USD 3.0bn of turnover on Friday. For most of the session, USDRUB was trading slightly above 50.00, but in the evening it moved lower, edging down at 49.53. In the meantime, the oil market provided little support for RUB, as Brent closed flat at USD 65.8/bbl. In contrast, EM FX currencies continued trading in the black, though they posted milder gains than before: MXN and TRY advanced 0.6% against USD, KRW rose 0.4%.
The key tax dates for the Russian FX market are 25 May (VAT and MET) and 28 May (Corporate profit tax). Exporters had already started selling FX to meet tax needs, and this week is unlikely to see any changes in that regards, which would be the key driver for the exchange market, in our view.
For the moment, the CBR’s interventions are negligible for the market so far, and we suggest that their daily volume remains within the USD 100-200mn range (as of now, only data for 14 May is available, with the CBR buying USD 181mn that day).
Separately, the 312-P FX auction was cancelled on Friday, as only one bank put a bid for one-month FX liquidity.