By Anna Andrianova
Pedestrians walk under a board listing foreign currency rates against the Russian ruble outside an exchange office in central Moscow on Nov. 10, 2014.
Russia’s international reserves extended their slide to the longest since 2008, declining by a fifth from last year’s peak as the central bank attempts to smooth the ruble’s decline.
The value of the stockpile has declined for 12 consecutive weeks, losing $7.2 billion in the seven days through Nov. 7 to $421.4 billion, the central bank said today. That compares with a $10.5 billion drop the previous week.
The Bank of Russia has struggled to limit the ruble’s drop as sanctions against Russia over the crisis in Ukraine sparked capital flight and accelerated inflation. The regulator dropped regular interventions starting Nov. 10 and it will intervene only if financial stability comes under threat. It temporarily limited ruble liquidity to help stabilize the currency.
The ruble’s weakening is a “bad recipe for the economy,” central bank First Deputy Governor Ksenia Yudaeva told lawmakers in Moscow today, according to Interfax.
The ruble has lost 23 percent against the dollar in the past three months, the worst performance among more than 170 world currencies tracked by Bloomberg. The central bank spent about $30 billion last month, when the ruble fell to a record.
The central bank purchased 55 tons of gold in the third quarter, amounting for the more than half of all gold purchases by central banks in the period, according to the World Gold Council.
Reuters: 14. November 2014
Ruble drops further on weak oil, sanctions threats
Nov 14 (Reuters) - The Russian rouble fell further on Friday, dragged down by weak oil prices and by fears of new Western sanctions against Russia because of the deteriorating ceasefire in eastern Ukraine.
The rouble was down more than 2 percent against the dollar shortly after opening, extending a 2 percent slide seen on Thursday. At 0800 GMT the rouble had recovered some ground but was down around 1.3 percent on the day against the dollar at 47.42., and down 1.4 percent to 59.05 against the euro.
Global oil benchmark Brent was near a four-year low below $78 per barrel early on Friday on concerns over excess supply and uncertainty over whether OPEC would cut output at a meeting in two weeks.
"The performance of crude oil ... could perhaps be given as a formal reason behind the soft price, but in our view the current trading levels of the Russian currency already price in subdued crude oil levels for the next 12 months," VTB Capital analyst Maxim Korovin said in a note.
He said that large price swings in the rouble have reflected low market liquidity which is in turn a consequence of extreme volatility.
The rouble could firm substantially next week, he added, as exporters acquire roubles to pay end-of-month taxes, with a central bank one-year forex repo auction on Monday also potentially positive for the rouble.
Russian assets are also under pressure because of fears that Western countries may introduce new sanctions against Russia over its actions in Ukraine.
"First of all, investors are afraid of the continuing discussion of new sanctions against Russia by representatives of the EU and U.S.," Airat Khalikov, senior analyst at Veles Capital, said in a note.
Earlier on Friday British Prime Minister David Cameron said Russia's actions in Ukraine are unacceptable and could lead to additional sanctions.
Earlier this week NATO accused Russia of sending military equipment into regions of eastern Ukraine controlled by rebels. Fighting has intensified around the rebel stronghold of Donetsk, putting further pressure on a patchy ceasefire.
Russian stock indexes were mixed on Friday, with a sizeable drop in the dollar-denominated RTS index that is dragged down by a weaker rouble, and a slight strengthening in the rouble-based MICEX index that conversely gains from a weaker rouble.
At 0800 GMT the RTS was down 1.6 percent to 996 points, while the MICEX was up 0.4 percent to 1,498 points.
----------------------------------------------------
(Reporting by Alexander Winning and Jason Bush, editing by Elizabeth Piper)
No comments:
Post a Comment