Russian rouble up on taxes, stocks firm on US hopes

MOSCOW : The Russian rouble firmed in early trade on Thursday, buoyed by tax-related currency purchases and strong oil p

By 0637 GMT, the rouble had gained 0.17 percent to 28.87 versus the dollar, near its week high and stepping away from the 2011 low of 30.20 hit in early August.

Versus the euro-dollar basket, the rouble firmed 0.12 percent to 34.62, trading within the 34.15-35.15 range. The central bank appears to be inactive in that range.

Against the euro, the rouble added 0.08 percent to 41.65.

"So far, everything is in favour of the rouble firming further -- external markets are in the positive, oil is fine, mineral extraction tax is due today," said Victor Anisimov, dealer at Aljba-Alliance bank.

The rouble may rise as high as 34.55-34.60 against the basket but the market will take a cautious stance, he added.

Tax-related rouble purchases by exporters are lending significant support to the Russian currency this week. Around 215-230 billion roubles ($7.06 billion) in mineral extraction tax must be paid by end of the day.

Tax requirements have already withdrawn 130.1 billion roubles ($4.59 billion) from the market this week, according to Trust bank, which expects Monday's income tax payments to soak up another 200 billion roubles.

Strong oil prices suggested Russia's oil-dependent currency and stock market were well supported.

Risk assets were also supported by expectations that the Federal Reserve Chairman Ben Bernanke would announce new measures to help sluggish economic growth when he speaks at the US Federal Reserve's annual symposium on Friday.

"Commodities have thus far proven among the most resilient to recessionary fears, and the markets will test this faith over the next several weeks. That suggests a positive opening for the Moscow exchanges, with further directional hints from the US weekly jobless data in the second half of the session," analysts at Uralsib said in a note.

Rising energy stocks pushed the dollar-based RTS index up 1 percent to 1,618.11 points, it’s strongest in a week.

The more liquid rouble-traded MICEX index rose 1.22 percent on the day, trading at 1,479.19 points, largely outperforming the broader emerging markets index, up 0.25 percent.

The market will further await data on US jobless claims, expected later in the day.

The spread on Russia's dollar bonds over comparable US securities narrowed by 7 basis points to 239, reflecting a substantial premium to the average emerging market index reading of 337, according to JP Morgan's EMBI+ debt indexes.

 

Copyright Reuters, 2011

 

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