The ruble gains value ahead of the ETP payout, but local risk holds back its growth

MOSCOW, May 26 (Reuters) – The ruble gained value on Friday due to support for upcoming tax payments, but this is largely offset by local foreign exchange demand, including by minimizing risk over the weekend given the current tightened military-policy political risk.

Today, at the same time, commodities corporations had their last chance to sell US currency-denominated export proceeds under the Single Tax Payment next Monday, which due to the US holiday, there are no dollar exchange transactions today.

Tomorrow at 18:00 Moscow time, the dollar/ruble exchange rate was 80.02, and here the ruble is gaining 0.2%.

The exchange rate of the euro/ruble pair is 85.85, and here the ruble is now growing by a quarter of a percent.

In tandem with the yuan, the ruble is also gaining a quarter of a percent, the quotations are close to 11.30.

According to Reuters calculations, April’s oil extraction tax, which is part of the PPE, increased by almost a quarter, ie by 3.927 rubles per ton, to 20.187 rubles per ton compared to March.

Local real flows for the purchase of foreign currency are currently shaped mainly by demand from Russian importers as supplies are diverted from the West to the East and new trade patterns emerge, as well as local investors purchasing the business of Western companies leaving the Russian Federation.

At the same time, unstable purchases of foreign currency during the change of ownership lead to significant fluctuations in the exchange rate, so Russian President Vladimir Putin ordered that a monthly limit of such transactions be set at USD 1 billion.

The First Deputy Chairman of the CBR Ksenia Yudaeva today announced the recommendation of the Government of the Russian Federation for buyers of foreign enterprises leaving Russia to buy foreign currency on the market evenly, but admitted that so far the mechanisms and distribution of the monthly purchase limit of $ 1 billion has not been formalized.

Outside, investors continue to monitor progress in talks to increase the U.S. government debt, which is currently capped at $31.4 trillion, as a successful resolution to this before the end of May will further spur demand for risk and commodities, while delaying this process will increase nervousness on the global markets.

Currently, the price of crude oil is rising after a significant 2.7% drop the day before. A barrel of Brent is estimated at USD 76.76 (+0.7%).

The focus is on the situation around the US government debt ceiling and the upcoming OPEC+ meeting in early June, for which there are no clear expectations after Saudi Arabia and Russia’s dissonant statements about the likelihood of further output cuts within the cartel.

In the FX market, by Friday evening, the US dollar began to rise against the euro and a basket of six key currencies, updating multi-week highs.

The euro/dollar pair is trading close to $1.0703 vs. $1.0719 at Thursday’s close, the dollar index is estimated at 104.37 vs. 104.22.

Today a bit earlier the dollar index reached 104.39 for the first time since March 17, and against the euro the US currency reached USD 1.0700 for the first time since March 20 against the backdrop of strong and pro-inflationary statistics from the US, which increases the chances of further tightening of Fed policy .

In particular, today it turned out that personal spending of the US population in April increased by 0.8%, income – by 0.4%, the volume of orders for durable goods in the US increased by 1.1% in April, and also improved over expected consumer confidence this month, according to the University of Michigan. (Moscow office)