BLBG:Ruble Poised for 8-Month Low to Dollar, Keeps Loss as Rate Held
The ruble headed for its lowest level against the dollar in more than eight months after oil, Russia’s chief export, dropped from a six-week high. The currency kept declines after Bank Rossii left its benchmark rate unchanged.
Russia’s currency depreciated 0.3 percent to 30.3401 against the dollar by 12:50 p.m. in Moscow. A close at that level would be the weakest against the greenback since Jan. 11. The ruble slid 0.2 percent against the euro to 41.4270.
Crude oil for October delivery dropped as much as $1.68 to $88.53 a barrel in New York, retreating from a six-week high as investors bet gains were overdone on concern Europe’s debt crisis will hobble the global economy. Bank Rossii left its refinancing rate unchanged for a fourth month at 8.25 percent today, as expected by all 23 economists in a Bloomberg survey, while narrowing the difference between its deposit and lending rates.
The ruble’s moves against the dollar and the euro pushed the currency down 0.3 percent to 35.3292, the weakest since Aug. 10 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 30.7242 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.
Ruble Bond Sale
Russia’s ruble bonds due August 2016 were little changed, with the yield up one basis point at 7.58 percent. The country’s ruble Eurobond also fell, pushing the yield two basis points higher to 6.993 percent.
The Finance ministry sold 4.6 billion rubles ($321 million) of government domestic bonds due April 2021 at the upper end of its yield guidance in an auction today, according to a statement by the ministry after the central bank’s rate decision.
The government cut the amount on offer earlier this week from 35 billion rubles to 10 billion rubles and set the yield guidance at 8 percent to 8.1 percent yesterday.
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
