VIEWPOINT: Tax period to support ruble, keep it from solidifying at 67 rubles/$1 - Rosbank
MOSCOW. Dec 12 (Interfax) - "Despite the suspension of Central Bank FX buying on the open market, only a fairly weak correlation between oil prices and the ruble exchange rate has been maintained: in November, the price of Brent crude fell 19.5%, while the USD/RUB rate increased just 1.9%. One explanation for the ruble's muted response is the large current account surplus. According to Central bank data, the surplus increased by $16.4 billion to $104.3 billion since the beginning of the year, regaining the level of 2011, when the price of oil was over $100 per barrel. Support for the current account is being provided by the growing volume of energy resources and lower exports, which began posting declines in August. Simultaneously, the outflow of private capital increased by $16.3 billion (to $53.5 billion) since the beginning of the year, reflecting the seasonal repayment of external obligations and placement of export revenue in FX deposits. A resumption of the interventions beginning in January 2019 will worsen the market's currency liquidity picture due to the additional outflow of about $15 billion in Q1 2019 under the budget rule. However, given the high surplus expectations in Q1 2019 ($42 billion according to Societe Generale) and moderate outflow of private capital, the effect on the ruble will not be so marked. The tax payment period begins next week, which on the strength of inertia will support the ruble exchange rate until the end of the year and prevent any attempts to solidify the ruble at a rate above 67 to the dollar," Rosbank said.
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