The ruble is poised for a 4.5 percent advance for the week, the biggest rally among 170 currencies tracked by Bloomberg
This article originally appeared at Bloomberg
Russia’s ruble headed for the best weekly gain against the dollar globally on demand from companies rushing to meet a tax deadline and as oil prices rebounded.
The ruble is poised for a 4.5 percent advance for the week, the biggest rally among 170 currencies tracked by Bloomberg. Crude oil, the nation’s main export commodity was poised for the first gain in three weeks, paring the decline this month to 12 percent.
The ruble’s strength “doesn’t look logical from the fundamental point of view,” Vladimir Vedeneev, chief investment officer at Raiffeisen Capital asset management in Moscow, said in e-mailed comments. “The move seems rather technical. Exporters have been selling the foreign-currency revenue.”
Russian companies must pay about 1.3 trillion rubles ($22 billion) in taxes this month, with the largest portion falling due on March 25, according to a Bloomberg survey of five economists. They must pay the amounts in the local currency, and exporters typically convert their foreign exchange into rubles for the purpose.
The ruble traded up 0.8 percent at 59.466 per dollar at 6:08 p.m. in Moscow, a gain of 21 percent from this year’s low on Jan. 30 as a truce took hold in eastern Ukraine and the central bank cut the benchmark interest rate twice. The Federal Reserve’s assurance to look for more progress in the jobs market and inflation before raising rates also buttressed the currency.
Still, a resumption in the oil-price declines and an economy headed for a recession this year cloud the outlook for the ruble .
“The local support for the ruble may linger until the end of the month,” Vladimir Evstifeev, an analyst at Bank Zenit in Moscow, said in an e-mailed note. “But if oil continues to hit new lows, the ruble will inevitably react.”
The dollar-denominated RTS Index of stocks gained 1.8 percent on Friday, heading for a weekly advance of 3.5 percent. The yield on five-year local-currency government bonds declined 30 basis points to 13.08 percent, down 20 points for the week.