Ruble gains as officials step up verbal support

Fri Dec 19, 2014 10:32am EST
 
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By Alexander Winning

MOSCOW (Reuters) - Russia's ruble strengthened on Friday after Finance Minister Anton Siluanov confirmed his ministry had sold foreign currency, and on expectations that exporters will increase dollar sales.

At 6:10 a.m. ET, the rouble was around 2.2 percent stronger at 60.13 to the dollar RUBUTSTN=MCX, and had gained 2.6 percent to trade at 73.77 to the euro EURRUBTN=MCX.

The rouble has seen intense selling pressure this week, and at one stage was down about 20 percent against the dollar, putting at risk the stability on which President Vladimir Putin has built his popularity.

The currency was on track to end the week over 2 percent lower, though the market remains volatile amid thin trading volumes.

Analysts at Rosbank said the rouble could stabilize at around 60 to 62 per dollar on what they called the central bank's conservative approach to rouble liquidity, and the expansion of its forex repo mechanism.

Government pressure on exporters not to hoard their foreign exchange revenues is seen as another positive for the rouble, which is now down some 45 percent against the dollar this year.

The end-of-month tax period begins in earnest next week, when Russian exporters have to convert their overseas earnings into rubles to pay taxes to the state budget.

Siluanov said early on Friday that the rouble would definitely firm at the beginning of next year. His verbal interventions are seen as part of government efforts to support the Russian currency.   Continued...

 
An employee counts Russian ruble banknotes at a private company's office in Krasnoyarsk, Siberia, December 17, 2014. REUTERS/Ilya Naymushin