Ruble Hits Strongest Levels Against Dollar in Nearly a Year

Demand related to month-end tax payments coupled with upcoming auctions of Russia’s popular OFZ treasury bonds led the ruble to levels not seen since August last year, Reuters reported.

The Russian currency firmed 0.1% to 62.53 versus the U.S. dollar on Tuesday, the level last seen on Aug. 1, 2018, taking its year-to-date gain to 11%.

The ruble was 0.2% stronger against the euro, at 71.20. Tax payments that usually prompt export-focused companies to convert their foreign currency revenues to meet local liabilities support the Russian currency.

The Finance Ministry will offer ruble-denominated OFZ bonds in its weekly auctions on Wednesday, and the bonds have proved popular among foreign investors.

On the global front, market players will keep an eye on a speech by U.S. Fed Chair Jerome Powell at the U.S. Council on Foreign Relations due later on Tuesday.

“Investors expect him to reiterate concerns about global economic weakness and the downside risks from increased protectionism ahead of this Friday’s G20 meeting,” VTB Capital analysts said.

Looking forward, the ruble is expected to weaken to 63 versus the dollar by the end of the week as it looks vulnerable around current levels, analysts at Rosbank said in a note.

Russian stock indexes were down, tracking a 0.4% decline in Brent crude futures to $64.61 per barrel. The dollar-denominated RTS index was down 0.2% at 1,385.0 points after briefly hitting its highest since mid-2014 of 1,392.9. The rouble-based MOEX Russian index was 0.4% lower at 2,750.3 points.