“Yields have risen because of the ruble’s depreciation,” Dmitry Khlebnikov, head of fixed-income trading at Citigroup Inc.’s unit in Moscow, said after the first auction was axed. “It would have been negative for the whole market had they sold at today’s levels.” The Finance Ministry sold all 20 billion rubles of five-and nine-year ruble securities. That followed two back-to-back cancellations as investors fled emerging-market assets on concern that Chinese economic growth is slowing and after the U.S. central bank began tapering. The ruble tumbled in evening trading after the Finance Ministry’s plan to buy 212.2 billion rubles in foreign currencies for its Reserve Fund fueled speculation the central bank’s support for the currency will be reduced. The ministry will buy foreign currency equivalent to 3.5 billion rubles daily from Feb. 20 2014 through May from the central bank, which will decrease its interventions by the same amount, the ministry said in an e-mailed statement yesterday. “The central bank will effectively sell $7 billion less in the market,” Anton Nikitin, an analyst at VTB Capital said.
Posted on: Sat, 22 Mar 2014 11:40:16 +0000