The ruble tends to grow in the boring low-activity trading on Friday

MOSCOW, Jan 20 (Reuters) – The ruble showed mostly positive dynamics on Friday amid lower exchange turnover, supported by sales of the currency under the fiscal rule and expectations of growth in sales of export earnings payable in January taxes, while exporters were not very active today.

Friday’s external background, as well as the news flow as a whole, were neutral for the ruble and ruble assets, but the irritant remains the western price ceiling for oil from the Russian Federation and the upcoming restrictions on Russian oil products, as well as the significant current Urals discount to base oil grades. However, this week oil prices gravitated towards growth, which is formally in favor of the Russian currency.

By 17.15 Moscow time, exchange quotes of the dollar/ruble pair were close to the 68.76 mark tomorrow, and the ruble was gaining less than 0.1%.

Since the beginning of the day, a trading range of 68.50-68.99 has been formed, the volume of transactions in this currency pair is less than $800 million.

The euro/ruble pair was at 74.35, and the ruble is gaining a third of a percent. Here, the volume of trading since seven in the morning barely exceeded the mark of 360 million euros.

Paired with the yuan, the ruble appreciates by 0.3%, to 10.10, with a trading volume of 4.6 billion yuan.

“The Russian ruble is trying to strengthen its positions, and now the ruble is moving towards last week’s levels and rising against the US dollar and the euro,” said Roman Blinov from Russ-Invest.

“The factor of the next tax period in the Russian Federation, as well as the position of oil prices, is a certain support for the ruble,” said Vladislav Silaev from Alfa Capital.

Since the beginning of the week, the ruble has shown slight growth against the US currency, just as modestly depreciating against the euro, but growing by almost a percentage against the Chinese currency, largely reflecting the dynamics of external markets and the Central Bank’s foreign exchange interventions in the yuan/ruble pair.

From last Friday until February 6, the Russian Central Bank has been selling foreign currency from reserves for rubles on the Moscow Exchange as part of the budget rule, and the yuan / ruble pair is used as an instrument with “tomorrow” settlements, for 3.2 billion rubles a day (almost $47 million in the equivalent ).

“According to our estimates, yuan sales will take place most of the first half of the year, maintaining the stability of the exchange rate in the range of 68-72 rubles per dollar,” Promsvyazbank analysts wrote in their review.

At the same time, they suggested that in the second half of the year the oil and gas market would improve due to increased activity in China and the resumption of global economic growth, the Ministry of Finance would start buying yuan in the NWF, and the ruble could weaken by the end of the year to 75-80 per dollar.

In the coming week, CBR interventions helped the ruble to withstand the pressure of recent global expectations of an approaching recession in the US as a reaction to the tightening of credit conditions by the Fed, while strong labor market indicators give the Fed carte blanche to continue fighting inflation.

On Friday evening, the US dollar came out slightly positive against the euro ($1.0816), gaining 1.6% against the yen (Y129.50), and showing mixed dynamics against most commodity and emerging currencies.

The dollar index is now valued at 102.45 against 102.02 at Thursday’s close.

Basic grades of oil continue to grow on Friday after strengthening the day before, a barrel of Brent is estimated at $86.53 (+0.4%).

Spot quotations of the Russian Urals reference oil blend for delivery to the northwestern regions of Europe are now near $53.44 per barrel, while at Thursday’s close they were at $52.46 . (Moscow Bureau)


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