Russian rouble steady ahead of OFZ bond auctions, stocks slide

MOSCOW, May 13 (Reuters) – The rouble held steady ahead of strong anticipated demand at Wednesday’s Russian treasury bond auctions and gained some support from central bank foreign currency intervention.

Expectations of a central bank rate cut in June pushed OFZ treasury bond prices to record highs on Tuesday, with the yield on the benchmark 10-year OFZ falling to 5.86%, an all-time low. The central bank cut the rate by half a percentage point to 5.5% in late April.

The finance ministry said it would offer two series of OFZ bonds, maturing in 2025 and 2035, at a weekly auction.

“We expect the investor bid to be skewed toward the shorter issue, given high interest for it at the secondary market from both international and local accounts lately,” VTB Capital analysts said in a note.

At 0747 GMT, the rouble was 0.1% stronger against the dollar at 73.63 and had gained 0.2% to trade at 79.78 versus the euro.

“On placement days, the rouble tends to strengthen,” said Andrei Kochetkov, leading analyst at Otkritie Brokerage.

The rouble was also buttressed by continued central bank daily foreign currency sales, although they declined to the equivalent of 14.7 billion roubles ($199.52 million), down from around 20 billion roubles earlier last week.

The state FX sales, which the central bank reports with a two-day lag, are pegged to prices for oil, an export vital to Russia’s economy. Global benchmark Brent crude futures were 2.5% lower at $29.23 a barrel.

Russian stock indexes were down.

The dollar-denominated RTS index was down 2% to 1,115.0 points. The rouble-based MOEX Russian index was 1.4% lower at 2,605.2 points.

Russian lender TCS Group reported a rise in first-quarter net profit by 26% year-on-year and said it expected to remain profitable in 2020, despite removing its guidance for the year. Shares in the group were down 3.2% in London.

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