Bloomberg News

Ruble Climbs Seventh Day to Dollar on Greece Aid, Tax Payments

November 27, 2012

The ruble gained for a seventh day against the dollar, the longest rally since September, after European officials reached a deal on aid for Greece and companies bought the Russian currency to pay taxes.

The ruble appreciated as much as 0.4 percent and closed less than 0.1 percent stronger at 31.0300 a dollar by 7 p.m. in Moscow. It strengthened 0.1 percent versus the central bank’s euro-dollar target basket and added 0.2 percent against the euro to 40.1530.

Euro-region finance ministers eased the terms on emergency aid for Greece, cutting the rates on bailout loans and suspending interest payments for a decade. Russian exporters and investors are buying the ruble to pay corporate income tax and purchase government bonds, known as OFZs, at an auction tomorrow, according to VTB Capital.

“Short-term ruble dynamics are unlikely to be weak due to the upcoming corporate tax and OFZ auction on Wednesday, coupled with positive global sentiment after the agreement on a Greek deal,” VTB Capital’s Maxim Korovin and Anton Nikitin wrote in an e-mailed note today.

The Finance Ministry plans to sell 15 billion rubles ($484 million) of five-year notes tomorrow. Russia sold the most seven-year ruble debt at an auction last week, with demand outstripping the 35 billion-ruble offer more than fivefold.

Non-deliverable forwards showed the ruble at 31.5038 per dollar in three months compared with 31.4795 yesterday.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries fell two basis points to 191, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields fell three basis points to 6.6857 percent.

To contact the reporter on this story: Lyubov Pronina in London at lpronina@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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