The Russian rouble steadied near 105 to the dollar in Moscow on Monday with market participants focused on a planned resumption of OFZ treasury bond trading after the central bank held its key interest rate at 20% last week.
The bank, which made an emergency rate hike in late February, said on Friday it would begin buying OFZ bonds when the Moscow Exchange resumed trading those papers on Monday, hoping to limit volatility.
At 0728 GMT, the rouble was steady against the dollar at 104.83 and had lost 0.2% to trade at 115.01 versus the euro.
In offshore markets, rouble bids were last indicated at 104.81 per dollar, having been as strong as 93.6 in earlier trade.
Russian rouble stabilises in offshore trade after heavy losses
Regular OFZ trading will resume at 1000 GMT after a morning auction to allow for prices to form after a more than three-week break. There are 55 OFZs in issue.
The central bank’s intervention on the market should help the curve adjust to the new environment, SOVA Capital said in a note, with short-term rates remaining close but above the current key rate of 20% and the curve being inverted.
“In addition, interventions on the market should provide additional liquidity, as the structural balance has seen a deficit since Feb. 25, peaking at 7 trillion roubles ($67 billion) on March 3 before moving to 2.4 trillion roubles as of Friday,” SOVA said.
Stocks and bonds last traded on the Moscow Exchange on Feb. 25. The central bank subsequently curbed trading as Western sanctions over events in Ukraine threw markets into turmoil.
The bank has yet to say when trading in instruments like stocks can resume, as it looks for ways to clear a backlog of transactions while avoiding a market collapse.
But a limited number of financial market operations have been permitted to resume over the next two weeks.
Later on Monday, Russia’s lower house of parliament will discuss the nomination of Central Bank Governor Elvira Nabiullina for another term by President Vladimir Putin.
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