Ruble is rising in taxes, OFZ are inactive pending CBR SD

MOSCOW, July 20 (Reuters) – The ruble gained significantly against the dollar and euro in Thursday’s trading and strengthened against the yuan on overwhelmingly positive factors, most notably the preparation of Russian exporters for the Single Tax Payment.

At 17:00 Moscow time, the dollar/ruble exchange rate was 90.50 with tomorrow’s calculations, and the ruble gained one percent.

The exchange rate of the euro/ruble pair was then 101.18, and here the ruble exchange rate increases by 1.4%.

Against the yuan, the ruble gained more than a third of a percent, trading close to 12.60, but fell to 12.70 in the morning, reflecting the significant strengthening of the Chinese currency in foreign markets.

Support for the ruble from Russian exporters could be revealed in the coming days, given the single tax payment on July 28, which includes MET, where commodity companies typically increase sales of export foreign exchange earnings in the domestic market.

“The market is waiting for a decision on the interest rate of the Central Bank on Friday, as well as large tax and dividend payments by exporters next week – about 1.4 trillion rubles,” Sberbank analysts say.

The Russian currency is still affected (although quite volatile in recent days) by the relatively high level of oil prices.

Now oil is on an uptrend, a barrel of Brent is trading at $80.00 versus $79.46 at yesterday’s close (+0.7%).

At the same time, the indicative quotations of the Russian Urals export mix are noticeably higher than the Western price cap of USD 60, with current values ​​close to USD 65 per barrel.

“Support from these factors, in our opinion, is able to stimulate the growth of the ruble in the coming days, which will lead to a reversal of the dollar / ruble pair in the range of 85-90 rubles,” believes Bogdan Zvarich of Banki.ru.

ON THE THROUGH OF THE PRICES INCREASES

Russian markets are waiting for an increase in the key CBR rate after the results of Friday’s board of directors of the Bank of Russia against the backdrop of accelerating inflation and rising inflation expectations of the population, and some analysts allow an unusual increase by a significant amount that should formally support the domestic currency.

“The stability of the inflation pattern since late June makes the key interest rate an inevitable scenario,” Rosbank analysts are sure.

“We expect an interest rate hike of 50 basis points to 8%. In our opinion, the potential for further tightening also exists and may be associated with the above-mentioned pro-inflationary risks, Raiffeisenbank analysts said.

According to Dmitry Polevoy from LocoInvest, consumer prices are rising more and more, among others due to due to the weakening ruble and stable demand, and the Central Bank has a good excuse to raise the exchange rate.

“For the ruble, each step is less than +150-200 bps. is not an event, what is more important is the balance of cash flows before taxation and the final dividend,” he believes.

The OFZ market, on the eve of the CBR Board of Directors, remains close to the extremes of profitability for many months – its participants take into account the likelihood of further price pressure related to, among others,

At the same time, OFZ profitability shows minimal changes today, but even before it remained above the level of 11% per annum, starting from 5-year bonds and ending at the farthest end of the debt curve.

“The increased growth in consumer prices is in line with expectations and will help maintain the downward trend in fixed rate OFZ quotes in the near future,” said Dmitry Monastyrshin of Promsvyazbank.

He noted that before tomorrow’s CBR meeting, investors will probably prefer to adopt a wait-and-see attitude (Moscow Office)