Ruble Drops after Investors Rate it as Overvalued

0
171

Ruble Drops after Investors Rate it as OvervaluedThe ruble fell after some investors estimated the currency has having been overvalued while others awaited the results of this week’s OPEC meeting.

The ruble dropped 1.6 percent to trade at 45.7050 per dollar as of 4:40 p.m. Moscow time. The yield on the 10-year ruble-denominated debt advanced 11 basis points to 10.30 percent after Russia’s Finance Ministry announced plans to auction 10 billion rubles ($219 million).

“This is primarily a technical correction after the strong growth at the end of last week,” Yury Tulinov, a Moscow-based head of research at OAO Rosbank, told Bloomberg News. “Given that nothing is de facto clear on OPEC, and oil may show considerable moves after the meeting, you’d expect there to be ruble volatility.”

Prices of the Brent crude surged 0.4 percent to $79.97 per barrel, buoying currencies of most oil exporting currencies, the ruble included.

Meanwhile, the Brazil’s real rallied on bets that President Dilma Rousseff may hire a finance minister who will revive Latin America’s biggest economy.

The real surged 0.6 percent to trade at 2.5310 per dollar as of 3:01 p.m. Sao Paulo time. Swap rates, which track forecasts of swings in interest rates, plunged 0.07 percentage point to 12.15 percent for the contract that matures in January 2017.

The real rose after a government official was quoted as saying that Joaquim Levy, the current chief of Bradesco Asset Management and previously the Treasury Secretary under former President Luiz Inacio Lula da Silva, may succeed Finance Minister Guido Mantega as soon as this week.

In order to boost the real, Brazil offloaded foreign-exchange swaps worth $197.4 million today and rolled over $683 million worth of contracts. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com