The ruble goes up against EPP, OFZ gains

MOSCOW, Jul 20 (Reuters) – The ruble continued to appreciate against the dollar and the euro as well as the yuan on Thursday afternoon on overwhelmingly positive factors, notably as exporters prepare for the Single Tax Payment.

At 14:00 Moscow time, the dollar/ruble was at 90.63 with tomorrow’s calculations, and the ruble gained 0.8%.

The exchange rate of the euro/ruble pair was then 101.56, and here the ruble gains 1%.

Against the yuan, the ruble is now gaining slightly more than 0.1%, trading close to 12.63, while it previously fell to 12.70, 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 unified tax payment on July 28, which also includes MET, where commodity companies typically boost sales of export profits.

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

Now oil is showing an increase, a barrel of Brent is valued at USD 79.78 against USD 79.46 at yesterday’s close (+0.4%).

At the same time, the indicative quotations of the Russian Urals export mix are well above the western price level of USD 60, the current values ​​are slightly below the level of 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.

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 several months – its participants take into account the likelihood of further price pressure, related to, among others,

Currently, OFZ yields show slight multidirectional changes in the range of -2/+1 basis points, but at the same time, starting from 5-year bonds to the furthest end of the curve, they remain above the level of 11% per annum.

“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)

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