Ruble Stable vs Dollar, Market Awaits Return of Treasury Treasury Bonds

Ruble Stable vs Dollar, Market Awaits Return of Treasury Treasury Bonds

This content was produced in Russia, where the law limits coverage of Russian military operations in Ukraine

MOSCOW, Sept. 9 (Reuters) The Russian ruble stabilized in the 60-61 range against the US dollar on Friday as the market waited for the Treasury Department’s return to the debt market with its weekly auctions of OFZ government bonds that it halted in February.

At 0734 GMT, the ruble was 0.2% stronger against the dollar at 60.60 RUBUTSTN=MCX and fell by 1% to 60.95 against the euro, EURRUBTN=MCXwhich have remained in narrow margins against both currencies since the second half of August.

The ruble is the world’s best-performing currency this year, buoyed by emergency capital controls introduced by the central bank in an attempt to stem a massive sell-off.

Market players are watching the Treasury Department plan to restart weekly auctions, which used to take place on Wednesdays, later in September to test the market’s appetite with limited volumes of OFZs on offer.

Russia suspended borrowing through the OFZ bonds, which it uses to plug budget gaps, in February, weeks before it launched what it calls a “special military operation” in Ukraine, triggering unprecedented Western sanctions against Moscow.

The Treasury Department does not currently need additional funds and aims to support the debt market and increase the liquidity of government bonds, says Evgeny Zhornist, portfolio manager at Alfa-Capital.

Russian stock indices rose. The ruble-based MOEX Russian index .IMOEX rose 0.7% 2,406.3, while the dollar-denominated RTS index .IRTS won 1.1% to 1,251.1.

Demand for equities may increase, while demand for short-term bonds will decline after the central bank cuts interest rates next week, said Georgy Vaschenko, deputy head of research at Freedom Finance Global.

A Reuters poll of economists predicted that the central bank will cut its key rate from 8% to 7.5% during its Sept. 16 board meeting.

For Russian stock guide see: RU/EQUITY

For Russian government bonds, see: 0#RUTSY=MM

(Reporting by Andrey Ostroukh; editing by Rashmi Aich)

((andrey.ostroukh@thomsonreuters.com ;))

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