Rouble holds steady ahead of OFZ bond auctions

MOSCOW: The rouble opened steady on Wednesday ahead of treasury bond auctions, settling after a hefty sell-off and recovery earlier in the week, with the rollout of COVID-19 vaccines supporting riskier assets.

At 0736 GMT, the rouble was flat against the dollar at 73.39 and had lost 0.1% to trade at 89.31 versus the euro.

The rouble could strengthen to 73 versus the greenback should updated economic forecasts from the US Federal Reserve later on Wednesday inspire markets and support risk appetite, said analysts from Sberbank CIB in a note.

BCS Global Markets said new and expanded COVID lockdowns would cap any gains.

Russian assets were dented on Monday by renewed fears of sanctions after news that US officials suspected Russia of a sweeping hacking campaign that hit the Department of Homeland Security.

Adding to the gloom, the FSB security service was identified by an international media investigation as being responsible for the attempted assassination of Kremlin critic Alexei Navalny.

Despite market fears of new possible penalties against Moscow, Russia increased its holdings of US government treasuries to $6.16 billion in November, from $5.96 billion in October and a multi-year low of $3.9 billion seen in March, according to US Treasury data.

The Russian finance ministry is in focus as it will hold two OFZ treasury bonds auctions that Russia is using to plug holes in the budget amid lower revenues from commodity exports and higher budget spending aimed at tackling the coronavirus crisis.

Such auctions serve as a gauge of demand for Russian assets and can buttress the rouble.

Brent crude oil, a global benchmark for Russia's main export, was down 0.5% at $50.50 a barrel but Russian stock indexes were climbing.

The dollar-denominated RTS index was up 0.4% to 1,396.2 points.

The rouble-based MOEX Russian index was 0.1% higher at 3,252.8 points.