Russian ruble firms in low volume as taxes approach
MOSCOW: The Russian ruble strengthened on Wednesday, moving towards 87 against the dollar with favorable month-end tax payments approaching, but in low volume trade after US sanctions halted exchange trading in the dollar and euro earlier in June.
A board showing currency exchange rates of the US dollar and euro against Russian ruble on display in a street in Moscow. -- Reuters.
Sanctions on Moscow Exchange MOEX.MM and its clearing agent, the National Clearing Centre (NCC), have led to varying prices and spreads as trading shifted to the over-the counter (OTC) market on June 14, obscuring access to reliable pricing for the Russian currency. On the interbank market, where liquidity can be low as major Russian banks that have been sanctioned cannot participate, the ruble was trading 1 percent higher at 87.40 at 0707 GMT against the dollar.
The average dollar-ruble mixed composite rate, calculated by LSEG and based on data from international brokers and counterparties, stood at 87.00. The central bank’s official dollar-ruble rate was set at 87.28 for June 26, calculated on the basis of OTC trading. Against the yuan, the ruble firmed 0.2 percent to 11.88, according to an analysis of the OTC market.
The yuan had surpassed the dollar to become the most traded currency with the ruble in Moscow before last week’s sanctions were imposed. It accounted for a 54 percent share of the FX market in May. Traders closing foreign currency positions and various technical difficulties concerning interbank limits when closing OTC market FX deals saw the ruble strengthen sharply to one-year highs in mid-June after the sanctions were imposed. It has eased from those highs since the government softened capital controls that have been supporting the ruble since October.
Month-end taxes, due on June 28, usually see exporters convert foreign currency revenues to pay local liabilities, additionally buttressing the ruble. Brent crude oil, a global benchmark for Russia’s main export, was up 0.5 percent at $85.43 a barrel. — Reuters.
