Ruble Higher After Avoiding Central Bank Intervention

by on December 26, 2013 6:30 pm GMT

The Russian ruble is higher after reaching the free-float zone where the Russian central bank will not intervene. The ruble has declined over nine percent in 2013 against the dollar, and the ruble was able to post a .2 percent gain this trading session, reaching 38.0836 rubles per dollar.

Since the Federal Reserve’s decision to taper last week, the ruble increased .8 percent. This has been contributed to the Bank Rossii not buying or selling the ruble as it reached four kopecks to the targeted rate of 38,05 rubles per dollar. The central bank is looking to continue reducing foreign-exchange interventions at the ruble moves to the free-floating ruble by the end of 2014.

“The market has been consolidating,” said Yury Tulinov, an analyst at OAO Gazprombank. The Moscow Exchange volumes and volatility have been declining below average. The ruble has been the victim, as many emerging market currencies, to risk-on/taper debacle. “It’s highly probable the ruble will continue strengthening in the beginning of the next year as the uncertainty about the tapering of stimulus in the U.S. dissipates,” continued Tulinov.

The volatility in Brent crude, Russia’s main export, has caused movement in the ruble, as well. Russian government bond maturing in 2027 fell one bps to 7.93 percent.