Media: Hedge funds continue to dump Russian rubles
American hedge funds are continuing to get rid of investments in rubles, while, at the same time, the price of the Russian currency stays in one place, ignoring the drop in oil prices.
One week before May 30, major traders at the Chicago exchange reduced bets on the ruble’s growth by 3% on the futures market, Finanz.ru web site reports.
The number of open contracts on the ruble has been decreasing for five consecutive weeks. Such a prolonged sell-off was last observed on the market in November 2014 – at the peak of the oil crisis, when its price had collapsed by nearly half in a few months.
According to the information of the US Commodity Futures Trading Commission, since the start of May, hedge funds have sold 12,000 contracts on the ruble, reducing their investment by one third, which is equivalent to the sale of 30 billion rubles being converted to foreign currency.
Trades on the Russian currency market have taken place under conditions of a “dead calm”: in a month, the price of Brent oil has managed to fall by 8%, rebound by 12% and once again drop by more than 10% (to $49.41 per barrel at 16:00 Moscow time last Friday), but during this time the ruble exchange rate has remained virtually unchanged.
Vladimir Evstifeev, head of the analytic department at Zenit Bank, believes that the calm in the ruble market could be the precursor to a storm.
Interest in Russian bonds has dropped sharply (auctions of federal loan bonds have ended in a loss for three consecutive weeks), and the Central Bank of Russia will likely lower its rates, limiting the profitability of ruble investments, he explains.
“For the ruble this means a reduction in the attractiveness from the previous speculative tactics. The risks of the speculative pyramid collapsing seem reasonably high,” Evstifeev states.
A weakening of the ruble could begin during the second half of June, Russia’s Rosbank predicts. The price could ultimately drop to 60 or more per dollar, Rosbank, Romura, Raiffeisen Bank and Sberbank CIB predict.