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. Last Updated: 07/27/2016

Ruble Extends Fall As Bank Stays Away




The ruble fell further Wednesday as the Central Bank refrained from intervening in the unified trading session, apparently saving reserves, dealers said.


The ruble's weighted average for Wednesday's settlement on the unified session of eight exchanges dropped to 28.5518 per dollar from 28.4920 per dollar Tuesday.


Based as usual on the average of the session, the Central Bank set its next-day exchange rate at 28.55 rubles per dollar, down from the previous 28.49.


"We did not see Central Bank sales. Maybe the Central Bank pulled out for a long time ahead of an expected dollar rise in February," said a Russian bank dealer.


"Or maybe it decided to step back just for a couple of days. ... Tomorrow we will see."


Trade volume, which if high, generally indicates the presence of the Central Bank, was down to $147 million from $170 million on Tuesday and an impressive $238 million Monday.


Dealers said pressure on the ruble could have stemmed from a big dollar purchase order or an OFZ ruble debt coupon payment, which through some indirect way hit the market.


Before the morning unified session opened, dealers had expected low ruble liquidity, high overnight rates and Central Bank chairman Viktor Gerashchenko's forecast for the ruble to strengthen by the end of January would help support the Russian currency.


However, at the start of the session the ruble rate was as low as the interbank market rate, which is less controlled by the Central Bank and usually sees weaker rates, they said.


"It was a bit artificial," said Vladimir Zavershinsky, senior dealer at Moskomprivatbank.


Gerashchenko said Tuesday the ruble would strengthen by the end of the month.


Dealers also said the ruble was likely to firm at the end of the month due to a seasonal increase in export revenue sales, but would drop again early February.


"Gerashchenko's comments seem not to impress the market much, but most probably are true and we can expect a rally," Bank Austria Moscow said in a market comment.


Rubles for next-day settlement were weaker in afternoon trade, quoted at 28.5900/28.6099 per dollar by 1:50 p.m. after a previous average of 28.5048.