Bounce in oil prices set a positive backdrop for the Russian FX market yesterday. At the opening, RUB returned below 63.00 against USD, encouraged by Brent’s move above USD 50.0/bbl. In the afternoon, Brent peaked at USD 50.40/bbl, but lost momentum, stepping down from intra-day highs. USDRUB immediately reacted, moving away from 65.55. By the evening, Brent dropped back to USD 50.0/bbl, but still gained 1.0% during the session. RUB firmed 0.7% against USD, closing at 63.10. In the meantime, commodity-based currencies traded mixed, but are still looking relatively resilient to oil’s volatility: AUD rose 1.3%, while NOK and NZD corrected down 0.4%. In the EM FX space, risk appetite remained subdued. Among the bright spots we highlight IDR and INR, which bounced 0.3-0.4%. At the same time, MXN lost 0.8%, followed by BRL and ILS, which weakened 0.6-0.7% against USD.
At the one-week FX repo auction, banks secured the offered amount in full, for the first time since May, when the regulator lowered the limit to USD 100mn. The average rate was set at 2.16%. Hence, the volume of banks’ FX repo debt to the regulator is to remain at USD 32.8bn.