BLBG:Ruble Strengthens for Third Day Versus Dollar as Tax Payment Period Begins
The ruble appreciated for a third day against the dollar and money-market rates rose the most in a month as Russian companies converted overseas earnings into local currency to pay taxes.
The ruble gained 0.3 percent to 31.555 per dollar as of 1:12 p.m. in Moscow, heading for the strongest closing level since Jan. 12. The overnight MosPrime rate banks say they charge to lend to each other jumped 22 basis points to 4.93 percent, the biggest advance since Dec. 22.
Companies are due to pay as much as 310 billion rubles ($9.8 billion) in taxes this week as the end-of-month payment period begins, according to Alfa Bank’s estimates. Taxes support the ruble as exporters convert revenue from abroad into the Russian currency to pay the government.
“Tighter liquidity is always good for the ruble,” Alexei Moiseev, chief economist for VTB Capital in Moscow, said by e- mail.
Lenders are due to repay as much as 171 billion rubles to the Finance Ministry today, Natalia Orlova and Dmitry Dolgin, Moscow-based analysts for Alfa Bank, wrote in an e-mailed research note Jan. 12.
“Budget spending in December wasn’t enough to provide the usual boost to liquidity,” Moiseev said. “It wasn’t even enough to allow banks to repay loans from the Ministry of Finance and the central bank.”
Oil, Russia’s chief export earner, climbed 0.1 percent to $100.79 per barrel in New York futures trading. A U.S. Federal Reserve report showed manufacturing in the New York region expanded at the fastest pace in nine months yesterday, while German investor confidence jumped the most on record in January, according to the Mannheim-based ZEW Center for European Economic Research.
OFZ Sale
“The environment so far has been good, with the oil-price worries and better risk appetite overall,” VTB’s Moiseev said.
Investors pared bets on the ruble weakening further, with non-deliverable forwards showing the Russsian currency at 31.969 per dollar in three months. Russia’s dollar-denominated bonds due in 2018 rose, pushing the yield down one basis point, or 0.01 percentage point, to 4.153 percent.
The Finance Ministry sold 18.6 billion rubles of bonds due June 2015 at an average yield of 7.67 percent, according to a statement on its website. The yield on the notes was little changed at 7.68 percent.
OFZs worth 45 billion rubles are due to be repaid today, according to data compiled by Bloomberg. A total 401 billion rubles’ worth are maturing this year, the most since at least 1996, when Bloomberg begain compiling the data.
After losing the most since 2008 last year, the ruble has advanced 1.9 percent against the dollar in 2012. That compares with a gain of 4.5 percent for Brazil’s real, a rise of 4.9 percent for India’s rupee and a drop of 0.3 percent for the Chinese yuan.
To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
