BLBG:Ruble Weakens To Dollar, Bond Yields Rise After Spain Downgraded
The ruble depreciated for the first day in three against the dollar and yields on Russia’s international debt rose after Moody’s Investors Service downgraded the debt ratings of Spain and Cyprus.
The Russian currency lost 0.3 percent to 32.5305 per dollar as of 10:07 a.m. in Moscow, heading for the biggest decline since June 8. The country’s $3.5 billion of Eurobonds due July 2018 fell, increasing the yield by five basis points, or 0.05 percentage point, to 3.801 percent.
Moody’s cut Spain’s rating three steps to Baa3 yesterday, two levels below Russia’s level of Baa1, signalling Europe’s debt crisis is deepening. The ratings service lowered Cyprus’s rating to Ba3 from Ba1. The European Union is Russia’s largest trading partner.
The yield on Spanish euro-denominated debt due 2020 has gained 158 basis points to 6.7276 percent this quarter, compared with a drop of 23 basis points to 3.804 percent for similar- maturity Russian dollar notes.
The ruble lost 0.4 percent to 40.9302 per euro and 0.3 percent to 36.3211 against the central bank’s target dollar-euro basket. Investors increased bets on the currency weakening, with non-deliverable forwards showing the ruble at 33.0842 per dollar in three months, compared with expectations of 33.019 per dollar yesterday.
To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
