The ruble continues to weaken in the absence of significant export earnings sales
MOSCOW, May 16 (Reuters) – The ruble tumbled for a fourth consecutive day after testing local lows on Tuesday morning as exporters’ decline in activity continued to weigh on them after roughly selling foreign exchange gains in the first decade of May in in exchange for the payment of ruble dividends.
An additional pressure factor may be the risk of limiting the inflow of foreign currency, both in the event of the adoption of another package of Western sanctions, and after the local market ignores the drop in oil prices in early May to several-month lows (revenues from the export of Russian oil arrive with a certain delay).
At 11.20 Moscow time, the dollar / ruble pair was at 80.00 with calculations “for tomorrow”, the ruble lost 1.1%.
Previously, the level of 80.25 to the dollar was reached for the first time since May 2.
The euro/ruble pair is trading close to 87.17, here the ruble is losing 0.9%.
Combined with the yuan, the ruble depreciated by 0.8% to 11.48.
Pressure on the ruble in recent days could also have been exerted by poor Russian macroeconomic indicators published last week, reflecting a shrinking current account surplus and an increase in the federal budget deficit.
“Basically, from our point of view, only the revival of economic growth and low inflation are working in favor of the ruble for now. All other factors – the federal budget deficit, the decline in export earnings over the past year, the outflow of capital, the continued demand for currency from the population, and the interest rate differential between the ruble and the dollar – are negative per ruble,” said Russ-Invest’s Alexander Harutyunyan. .
At the same time, market participants are waiting for the situation of the ruble to improve by the end of the calendar month – on May 29, export corporations will pay taxes, e.g. profits.
According to Reuters calculations, April’s minerals extraction tax paid this month on crude oil rose by almost a quarter compared to March, or 3,927 rubles per ton, to 20,187 rubles.
Meanwhile, on foreign markets, crude oil is currently trading in positive territory after yesterday’s rebound from 10-day lows. A barrel of Brent is now trading at $75.62 (+0.5%), down from $73.50 the day before.
Oil prices rose for the second day in a row, supported by the US government’s plans to replenish its strategic oil reserves, as well as forest fires in Canada, fueling concerns about commodity supplies.
According to Ekaterina Krylova from Promsvyazbank, in addition to this support, the proximity of the car season and the emergence of oil shortages in the world remain a plus for the oil market.
“In the absence of clear negative news from the US financial sector, we expect Brent crude prices to return to $80 a barrel,” she said.
In Forex, the US dollar fell against the euro ($1.0890) and the yen (Y135.77), as well as against a basket of six key currencies (102.29), but at the same time it is up against most emerging market currencies (which may also be reflected in the current negative dynamics of the ruble).
The growing Forex segment was under pressure from poor Chinese April statistics released in the morning, while the dollar is supported by optimism resulting from the expectations of further rate hikes by the Fed, but at the same time the US currency is under pressure due to uncertainty about the new ceiling of US public debt.
Markets focus on US releases for April retail sales (15:30 Moscow time) and industrial production (16:15 Moscow time); ECB President Christine Lagarde’s speech is scheduled for 5pm Moscow time, with speeches from senior Fed officials expected in the evening.