Bloomberg News

Ruble Retreats From Bank Rossii Intervention Zone as Crude Drops

February 15, 2013

The ruble weakened, retreating from the level at which traders say the central bank may intervene to curb gains, as crude oil slid.

The Russian currency fell 0.2 percent against the basket to 34.6891 after closing stronger than 34.65 yesterday, the first time since Jan. 24. The ruble dropped 0.1 percent against the dollar to 30.1235 as of 11:59 a.m. in Moscow, declining for the third day.

Crude dropped 0.3 percent to $117.69 a barrel in London, the second day of losses. Bank Rossii bought about $600 million and 48 million euros ($64 million) to slow the currency’s advance in January, the regulator said on its website.

“So far there are no specific interventions, but everybody knows they start below 34.65, so nobody is rushing there,” Dmitry Sinitsyn, head of forex operations at Credit Suisse Moscow, said by e-mail.

The monthly taxation period, when exporters sell foreign currency to pay ruble taxes, starts today with obligatory contributions to the pension fund. High oil prices and support from taxpayers should push the ruble to 34.45-34.50 against the basket, Alexander Myulberger, head of foreign exchange and interest rates trading at BCS Financial Group, said by e-mail.

Taxes will support the ruble at the 30 dollar level, while the euro’s decline against the greenback will push the Russian currency higher against the basket, said Dmitry Polevoy, an analyst at ING Groep NV.

“The central bank doesn’t buy a lot, this is more a mental level for the market rather than a real hurdle,” Polevoy said by e-mail.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net


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