MOSCOW: The rouble firmed versus the dollar on Monday, steered by expectations that export-focused companies will continue converting foreign currency into local currency this week to meet local tax payments.
Russian stocks were steady.
The local tax payment period will be the main driver for the rouble this week as exporters are widely expected to keep on converting foreign currencies to meet local liabilities due on Monday and Thursday.
At 0804 GMT the rouble was 0.3 percent stronger against the dollar at 30.35 , and 0.1 percent weaker versus the euro at 40.13.
The Russian currency was 0.1 percent stronger at 34.75 against the euro-dollar basket..
"I don't expect major changes in the basket, as exporters sell revenues at a steady pace. The basket could reach the zone of central bank interventions (34.65 roubles) thanks to a positive external background and the selling," a dealer at a Russian bank said.
The central bank keeps the rouble within a floating band, currently at 31.65-38.65 roubles, where it buys foreign currencies closer to the lower boundary and starts selling dollars and euros when the rouble weakens towards the upper boundary.
Yields on long-term domestic treasury bonds, so called OFZs, edged down on Monday , but remained pressured by expectations for monetary policy easing towards the second half of the year.
"We think the reasons for the curve steepening are technical, rather than reflecting expectations that the central bank is to cut rates," analysts at VTB Capital said in a note.
"Hence, the long end of the OFZ curve is mostly in (the hands of)international investors and non-resident investors were actively taking profits on long-dated OFZ recently after the launch of Euroclear settlement."
Euroclear began settling OFZ domestic bonds with over-the-counter trades in early February, finally implementing a long-awaited market overhaul that could attract $20 billion in foreign capital to Russia, according to Euroclear. On-exchange deals via the Belgium-based settlement bank are expected to begin in March.
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