SF: Ruble Drops to Four-Week Low Versus Dollar as Oil Declines
June 27 (Bloomberg) -- The ruble slid to its weakest against the dollar in a month as oil, Russia's chief export earner, dropped on speculation the International Energy Agency may release more of its stockpiles to steady prices.
The ruble lost 0.8 percent to 28.3849 per dollar as of 12:53 p.m. in Moscow, the weakest intraday position since May 25. The Russian currency was down 0.2 percent at 40.1898 per euro, leaving it 0.4 percent weaker at 33.6940 versus the central bank's target dollar-euro basket, its lowest level in two months based on closing prices.
The IEA will act again if needed after announcing its third release of emergency stockpiles since its creation in 1974 last week, aimed at stabilizing prices as the war in Libya chokes global crude supplies, Executive Director Nobuo Tanaka said in Beijing June 25. Crude for August delivery dropped as much as $1.34 a barrel today, and last traded down 1.2 percent at $90.05 a barrel.
"The oil and Russia relationship remains close," Chris Weafer, chief strategist and head of research for Russia at ING Groep NV in Moscow, wrote in an e-mailed note June 25. Oil prices "will again be one of the major factors determining Moscow's bourses and the ruble," he wrote.
Crude prices slipped 15 percent in the three months after the IEA last released emergency supplies in September 2005. The agency released stockpiles after Hurricane Katrina knocked out 10 percent of U.S. refining capacity.
Russian government dollar bonds due 2015 fell, pushing the yield up eight basis points to 2.999 percent. The country's ruble Eurobond was little changed at 7.008 percent.
Non-deliverable forwards, which allow companies to hedge against currency movements, show the ruble at 28.6438 per dollar in three months.
