The Bank of Russia this week made its heaviest currency intervention in more than a month, according to WSJ, to try to stem the escalating trend of Ruble collapse... but it's not working. Chatter of three significant interventions this week (which are quite apparent in the USDRUB chart) have had less and less positive impact on the currency and even with warnings of jail for FX speculators, the post-intervention selling continues. It appears, however, that the main pressure today is in the Russian bond market as 10Y RUB Bonds cracked 80bps higher to 12.04% yield... the pressure mounts on Putin.
As WSJ reports, [4]
Central bank data showed Friday that it spent $1.9 billion to ease downward pressure on the ruble on Wednesday after selling $700 million on Monday.
The central bank eliminated regular interventions and let the ruble float freely in early November after the nearly $30 billion it spent from reserves failed to stop the ruble’s rapid depreciation in October. Despite the free-float policy, the central bank said it retains the right to intervene suddenly and at any level if it deems the country’s financial stability is threatened by the ruble rate.
On Thursday, President Vladimir Putin asked the central bank to save the ruble from falling. The central bank later warned it may open an investigation into the possible manipulation of the ruble, which has lost some 40% of its value against the dollar due to massive capital flight, sliding oil prices and Western sanctions.
Interventions having less and less impact...
as The Ruble tracks the price of oil almost perfectly off the highs...
[5]
One wonders if FX speculation warnings pushed speculators into the bond market....
[6]
Charts: Bloomberg
