Yesterday, the Russian currency endured a rather volatile session, starting the day in the red and almost returning to Friday’s levels by the close. In the afternoon, RUB was trading at 56.80, lacking support from the oil market. In the evening, Brent attempted to pare some of the daily losses, but stumbled, to close at USD 57.3/bbl (-1.4%). However, that provided some support to the Russian FX market, so RUB moved back to 56.55, thus weakening only 0.2% against USD. Meanwhile, BASKET firmed 0.4%, as the uncertainty around Greece pushed EUR down as low as 1.100. An agreement between the Greek government and its official creditors was reached early Monday morning, but it still requires the various national parliaments to approve the deal. If approved, it could result in a third bailout of near EUR 90bn. However, the key issue of debt sustainability remains unaddressed, and the Greek government has ended up in a worse position, since they have agreed to a set of proposals that are more onerous than those rejected in the Greek referendum.
The EM FX universe traded on a softer footing. The EM FX index closed 0.1% stronger, but solely due to the 0.8% increase in BRL and TRY. Asian currencies continued to underperform, with SGD slipping 0.4% and THB weakening 0.3%. Commodity-based currencies traded heavy: NOK dropped 1.0%, AUD and NZD lost 0.5% and 0.4%, respectively.
Separately, banks secured USD 1.0bn in total from the CBR yesterday, taking the whole size of USD 600 at the 28-day FX repo auction and USD 442mn at the 312-P FX auction (also for a 28-day term). Hence, banks refinanced their liabilities, maturing this week, and on Wednesday the total FX repo debt to the regulator is to remain at USD 32.8bn.