The ruble headed for its lowest level against the dollar in more than eight months, almost erasing it’s gain this year, after oil, Russia’s chief export, dropped for a second day. Russia’s currency depreciated 0.3 percent to 30.5500 against the dollar by 12:14 p.m. in Moscow, trimming its gain in 2011 to less than 0.1 percent. A close at that level would be the weakest against the greenback since Jan. 11. The ruble was 0.9 percent weaker at 42.0454 versus the euro, heading for its lowest close since Aug. 10. Crude oil for October delivery dropped as much as 90 cents to $88.01 a barrel in electronic trading in New York, adding to yesterday’s 1.4 percent slide. Investors bet that increasing U.S. fuel stockpiles and signs of a weakening economy indicate energy demand will decline. The ruble’s moves against the dollar and the euro pushed the currency down 0.6 percent to 35.7127, the weakest since December based on closing prices, against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters. The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. Investors increased bets the ruble will weaken further with non-deliverable forwards showing the currency at 30.9535 per dollar in three months. The contracts provide a guide to expectations of currency movements and interest-rate differentials and allow companies to hedge against currency swings. To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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