FACTBOX-Key moves in Russian rouble
2010-04-19 13:20 (UTC)
MOSCOW, April 19 (Reuters) - Russia's rouble weakened on Monday along with other commodity currencies, heading away from 16-month peaks, but strong oil prices and monthly tax payments are still expected to smooth negative external factors.
Following are key facts on the rouble and central bank intervention. For a story on Monday's move see
BASKET
Russia introduced a basket for tracking the rouble's course on Feb. 1, 2005, initially made up of 0.1 euros and 0.9 dollars.
The euro's share was gradually increased to reach the current 0.45 euros and 0.55 dollars composition on Feb. 8, 2007.
In January 2009, the central bank defined the rouble's wide trading band as 26 to 41 roubles. This remains in force and the central bank says it has no plans to change it for now.
Within that set trading band, the central bank introduced a 3-rouble-wide floating corridor, whose boundaries are shifted up or down by 5 kopecks for each $700 million of central bank intervention at, respectively, the upper or lower boundary.
On April 16, the central bank was seen intervening on the market and eventually moved the boundaries, bringing the band to 33.60-36.60 roubles, dealers said.
FOCUS
During oil-fuelled economic boom years, the central bank used investors' appetite for the rouble to allow a gradual appreciation to fight inflation.
The rouble's strengthening trend reversed in August 2008. That autumn the authorities' focus switched to supporting the economy and markets through the financial crisis and credit crunch.
The controlled devaluation ended in January 2009. But the central bank has continued regular interventions on the market, aimed at preventing excessive rouble volatility in either direction without changing broader market trends.
Within the next year to year and a half the central bank intends to provide necessary conditions for a switch to inflation targeting and the free float but the policy change itself will be a political decision.
RESERVES
Russia's gold and foreign exchange reserves, the world's third largest, give it a powerful weapon against speculators betting on a weaker rouble.
The coffers were reduced by rouble-supporting interventions in late 2008-early 2009, but are now being replenished by foreign currency purchases to restrain the latest rouble rally.
With the help from the central bank's operations, aimed at slowing down the rouble rally, Russia's reserves recovered to $448.6 billion by April 15, closing in on levels of late 2008.
KEY ROUBLE MOVES
April 19, 2010: rouble down on risk aversion amid charges against Goldman Sachs and weaker oil.
Feb. 18-April 17, 2010: rouble on firm upward trend thanks to strong oil, prompting the central bank to shift the floating boundary 28 times and to bring the band to 33.60-36.60. On April 17, the rouble hit its highest since December 2008 of 33.60 versus the basket.
Feb. 9-March 17, 2010: rouble rallies to lower basket boundary of 35.0 versus, following rise in oil prices. Strong data and carry trade also in rouble's favour.
Jan. 25-Feb 1, 2010: rouble at one month lows, loosing ground after the central bank official said the rouble had potential to fall towards the higher basket boundary of 38.0.
Jan. 11-22, 2010: rouble stable close to lower floating basket boundary in inactive trade after long New Year holidays.
Dec. 23-30, 2010: rouble is mainly driven by banks clients' interests and stays very volatile, trading from 35.11 to 36.41 on the thin market ahead of long holidays.
Nov. 19-Dec. 22, 2009: rouble eases after the central bank rhetoric against the currency's rally. Interest to reduce risks and demand for dollars and euros ahead of long New Year holidays also pressures on the rouble.
Sept. 2-Nov. 18, 2009: rouble rallies on rising oil prices, improving global economic outlook and renewed interest of investors in riskier but higher-yielding emerging markets currencies. Central bank resumes regular interventions from Sept. 24. The rouble firms nearly 9 percent to 35.03 against the basket, from 37.97 on Sept. 1.
Jul. 10, 2009: the central bank expands the rouble's floating corridor to a 3-rouble width, from previous 2 roubles.
June 2009: the central bank changes the conditions for interventions, shifting the floating corridor by 5 kopecks after each $700 million of purchases instead of $500 million.
April 20, 09: rouble begins a sharp retreat, tracking weaker oil prices and domestic stock.
March 20, 2009: rouble strengthens beyond 39 per basket; the central bank intervenes regularly in subsequent weeks, with dealers saying it moves its bid by 5 kopecks each time it purchases $500 million on the currency market.
Feb. 5, 2009: rouble briefly hits the 41 band boundary but recovers without any central bank interventions; the currency stabilises in the 41-39 range in subsequent weeks.
Jan. 22, 2009: c.bank says it will stop widening the corridor, defining its boundaries as 26-41 roubles.
Nov. 11, 2008 - corridor widened to 30.70-71, marking the start of a gradual devaluation process during which the band is regularly widened, taking the rouble to 37.80 by Jan. 21.
Sep. 4-Nov. 10, 2008 - regular interventions to stop rouble weakening beyond 30.40-30.41 versus the basket.
Aug. 8-11, 2008: rouble sells off sharply during Russia's military conflict with Georgia; central bank sells an estimated $12-13 billion to stop basket weakening beyond 30.10.
Jun. 10-Aug. 4, 2008: appreciation of roughly 38 kopecks; taking the rouble to a historic high of 29.26 per basket.
Jun. 26 - Aug. 9, 2007: appreciation of roughly 25 kopecks in three steps, at the end of which the central bank's new bid level seen around 29.6 roubles.
OUTLOOK
Recent rapid rally may be running out of steam, especially given uncertainty on global markets. But still strong commodity prices, attractive carry trade and month-end tax payments in Russia may prop up the rouble in the short-term.
Consensus forecast from analysts, polled by Reuters late last month, shows the rouble at 29.50 per dollar and 33.89 versus the basket in 12 months, respectively from 29.23 and 33.75 on April 19.
2010-04-19 13:20 (UTC)
MOSCOW, April 19 (Reuters) - Russia's rouble weakened on Monday along with other commodity currencies, heading away from 16-month peaks, but strong oil prices and monthly tax payments are still expected to smooth negative external factors.
Following are key facts on the rouble and central bank intervention. For a story on Monday's move see
BASKET
Russia introduced a basket for tracking the rouble's course on Feb. 1, 2005, initially made up of 0.1 euros and 0.9 dollars.
The euro's share was gradually increased to reach the current 0.45 euros and 0.55 dollars composition on Feb. 8, 2007.
In January 2009, the central bank defined the rouble's wide trading band as 26 to 41 roubles. This remains in force and the central bank says it has no plans to change it for now.
Within that set trading band, the central bank introduced a 3-rouble-wide floating corridor, whose boundaries are shifted up or down by 5 kopecks for each $700 million of central bank intervention at, respectively, the upper or lower boundary.
On April 16, the central bank was seen intervening on the market and eventually moved the boundaries, bringing the band to 33.60-36.60 roubles, dealers said.
FOCUS
During oil-fuelled economic boom years, the central bank used investors' appetite for the rouble to allow a gradual appreciation to fight inflation.
The rouble's strengthening trend reversed in August 2008. That autumn the authorities' focus switched to supporting the economy and markets through the financial crisis and credit crunch.
The controlled devaluation ended in January 2009. But the central bank has continued regular interventions on the market, aimed at preventing excessive rouble volatility in either direction without changing broader market trends.
Within the next year to year and a half the central bank intends to provide necessary conditions for a switch to inflation targeting and the free float but the policy change itself will be a political decision.
RESERVES
Russia's gold and foreign exchange reserves, the world's third largest, give it a powerful weapon against speculators betting on a weaker rouble.
The coffers were reduced by rouble-supporting interventions in late 2008-early 2009, but are now being replenished by foreign currency purchases to restrain the latest rouble rally.
With the help from the central bank's operations, aimed at slowing down the rouble rally, Russia's reserves recovered to $448.6 billion by April 15, closing in on levels of late 2008.
KEY ROUBLE MOVES
April 19, 2010: rouble down on risk aversion amid charges against Goldman Sachs and weaker oil.
Feb. 18-April 17, 2010: rouble on firm upward trend thanks to strong oil, prompting the central bank to shift the floating boundary 28 times and to bring the band to 33.60-36.60. On April 17, the rouble hit its highest since December 2008 of 33.60 versus the basket.
Feb. 9-March 17, 2010: rouble rallies to lower basket boundary of 35.0 versus, following rise in oil prices. Strong data and carry trade also in rouble's favour.
Jan. 25-Feb 1, 2010: rouble at one month lows, loosing ground after the central bank official said the rouble had potential to fall towards the higher basket boundary of 38.0.
Jan. 11-22, 2010: rouble stable close to lower floating basket boundary in inactive trade after long New Year holidays.
Dec. 23-30, 2010: rouble is mainly driven by banks clients' interests and stays very volatile, trading from 35.11 to 36.41 on the thin market ahead of long holidays.
Nov. 19-Dec. 22, 2009: rouble eases after the central bank rhetoric against the currency's rally. Interest to reduce risks and demand for dollars and euros ahead of long New Year holidays also pressures on the rouble.
Sept. 2-Nov. 18, 2009: rouble rallies on rising oil prices, improving global economic outlook and renewed interest of investors in riskier but higher-yielding emerging markets currencies. Central bank resumes regular interventions from Sept. 24. The rouble firms nearly 9 percent to 35.03 against the basket, from 37.97 on Sept. 1.
Jul. 10, 2009: the central bank expands the rouble's floating corridor to a 3-rouble width, from previous 2 roubles.
June 2009: the central bank changes the conditions for interventions, shifting the floating corridor by 5 kopecks after each $700 million of purchases instead of $500 million.
April 20, 09: rouble begins a sharp retreat, tracking weaker oil prices and domestic stock.
March 20, 2009: rouble strengthens beyond 39 per basket; the central bank intervenes regularly in subsequent weeks, with dealers saying it moves its bid by 5 kopecks each time it purchases $500 million on the currency market.
Feb. 5, 2009: rouble briefly hits the 41 band boundary but recovers without any central bank interventions; the currency stabilises in the 41-39 range in subsequent weeks.
Jan. 22, 2009: c.bank says it will stop widening the corridor, defining its boundaries as 26-41 roubles.
Nov. 11, 2008 - corridor widened to 30.70-71, marking the start of a gradual devaluation process during which the band is regularly widened, taking the rouble to 37.80 by Jan. 21.
Sep. 4-Nov. 10, 2008 - regular interventions to stop rouble weakening beyond 30.40-30.41 versus the basket.
Aug. 8-11, 2008: rouble sells off sharply during Russia's military conflict with Georgia; central bank sells an estimated $12-13 billion to stop basket weakening beyond 30.10.
Jun. 10-Aug. 4, 2008: appreciation of roughly 38 kopecks; taking the rouble to a historic high of 29.26 per basket.
Jun. 26 - Aug. 9, 2007: appreciation of roughly 25 kopecks in three steps, at the end of which the central bank's new bid level seen around 29.6 roubles.
OUTLOOK
Recent rapid rally may be running out of steam, especially given uncertainty on global markets. But still strong commodity prices, attractive carry trade and month-end tax payments in Russia may prop up the rouble in the short-term.
Consensus forecast from analysts, polled by Reuters late last month, shows the rouble at 29.50 per dollar and 33.89 versus the basket in 12 months, respectively from 29.23 and 33.75 on April 19.