The ruble is growing against the dollar and the yuan, taking into account interventions and FX, but in the red against the euro

MOSCOW, Jan 23 (Reuters) – The ruble rises in price against the dollar and yuan in the main exchange session, taking into account CBR interventions in the Chinese currency and the weakening of the US dollar in forex, expectations of growth in sales of tax-payable export earnings and current oil prices near seven-week highs can also be supported .

By 10.55 Moscow time, exchange quotes of the dollar/ruble pair were close to the 68.63 mark, and the ruble was gaining 0.3%.

Paired with the yuan, the ruble is gaining 0.2%, quotes are close to 10.10.

Against the euro, the ruble is depreciating by 0.3% (74.82), and earlier today the single currency cost more than 75 rubles – this reflects its strengthening in foreign markets.

From last Friday until February 6, the Russian Central Bank has been selling Chinese yuan for rubles from reserves as part of the budget rule, for 3.2 billion rubles a day (almost $47 million equivalent), which acts as support for the Russian currency.

Russian exporters this week may increase the sale of foreign currency for rubles for upcoming tax payments, while from the beginning of 2023, almost all taxes, fees and insurance premiums of the corporation, as well as other taxpayers, are paid in a single tax payment (this month – January 30).

“We believe that the dollar / ruble during today’s trading session will continue to trade in the range of 68-69 rubles, with attempts to test its lower limit against the background of the activation of exporters on the eve of the end of the main tax payments,” Egor Zhilnikov from Promsvyazbank believes in this regard.

According to Bogdan Zvarich from Banki.ru, the sale of foreign currency by exporters by the peak of tax payments may lead the ruble to strengthen to 68 per dollar, with subsequent attempts to move into the range of 65-68.

Meanwhile, on foreign markets, the euro today, in tandem with the dollar, reached $1.0926 for the first time in nine months, the current growth of the single currency is half a percent ($1.0910) .

The dollar index is estimated at 101.74 against 101.99 at Friday’s close, and earlier today it was close to updating the minimum since the end of May last year, falling to 101.57.

Forex is playing out expectations of an ECB rate hike of half a percentage point at once at the next meeting and further tightening of policy at the next meetings, and such sentiments were fueled by fresh hawkish comments from central bank board member Klaas Knoth.

In parallel, the Fed is expected to raise the rate by only a quarter of a percentage point in February, while the futures market is already setting expectations for a possible reduction in the dollar rate in the second half of the year, taking into account the easing of inflationary pressure in the US, as well as signals about the cooling of the US consumer and housing markets.

Base oil grades showed minimal negative changes on Monday, a barrel of Brent is priced at $87.50, which is close to the maximum value of $87.85 since December 5, reached last week in anticipation of increased demand for fuel from China, which eased anti-COVID restrictions.

Spot quotations of the Russian Urals reference oil mixture for delivery to the northwestern regions of Europe at Friday’s close were at $54.24 per barrel .

The significant current Urals discount to base oil grades, coupled with the western price ceiling for oil from the Russian Federation and the upcoming restrictions on Russian oil products, is an important factor in putting pressure on the ruble exchange rate, as it reduces the volume of foreign exchange earnings on the domestic market. (Moscow bureau)

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