Ru­ble ends record ris­ing run

The Pak Banker - - Front Page -

MOSCOW: The ru­ble ended its long­est-ever strength­en­ing streak against the cen­tral bank's tar­get bas­ket as com­pa­nies sold the cur­rency amid spec­u­la­tion it has gained too much be­fore the Rus­sian hol­i­day break.

The cur­rency snapped a 10-day ad­vance against the dol­lar-euro bas­ket, weak­en­ing 0.4 per­cent to 34.7554 ver­sus the mech­a­nism used by Bank Ros­sii since 2005 to limit swings in the ru­ble that dis­ad­van­tage ex­porters.

It dropped for the first day in seven against the dol­lar, end­ing the long­est ris­ing streak to the green­back since July, and snapped seven days of gains against the euro.

The ru­ble has re­bounded over the past two months as oil prices surged 10 per­cent and the cen­tral bank in­di­cated it may raise Rus­sia's key in­ter­est rates, bol­ster­ing the ap­peal of ru­ble-de­nom­i­nated as­sets. Traders have be­come more bullish on the ru­ble in De­cem­ber, with the cur­rency's one-week risk-re­ver­sal rate -the pre­mium of put op­tions over calls --drop­ping to 0.75 per­cent, from 1.25 per­cent Nov. 30.

The ru­ble's record run means that "tech­ni­cally it looks over­bought now and a short-term correction is on the cards," De­nis Kor­shilov, head of for­eign-ex­change trad­ing in Moscow at Cit­i­group Inc., said by e-mail to­day. Large Rus­sian banks are "clos­ing some ru­ble longs ahead of the long hol­i­days," he added, re­fer­ring to the po­si­tions in­vestors place on se­cu­ri­ties they ex­pect to ap­pre­ci­ate.

The ru­ble was 0.7 per­cent weaker at 30.46 per dol­lar by 1:19 p.m. in Moscow, and slid 0.2 per­cent to 40.01 per euro. The bas­ket rate is cal­cu­lated by mul­ti­ply­ing the dol­lar-ru­ble rate by 0.55, the euro-ru­ble rate by 0.45, then adding them to­gether. - PB News

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