BLBG:Ruble Heads for Lowest in Three Months, Bonds Fall as Oil Drops
The ruble headed for the weakest level against the dollar in almost three months and Russia’s local bonds fell as oil, the country’s chief export earner, declined in New York.
The Russian currency depreciated as much as 0.6 percent before paring its decline to 0.1 percent at 30.1425 per dollar as of 1:21 p.m. in Moscow, heading for the lowest close since Feb. 16. The yield on 119 billion rubles ($3.9 billion) of OFZ bonds due 2021 rose four basis points, or 0.04 percentage point, to 8.05 percent.
Crude futures slipped 1.2 percent to $95.94 per barrel in New York, poised for a second weekly drop. Oil may extend declines next week amid rising U.S. stockpiles and concern the debt crisis in Europe will spread, according to a Bloomberg survey.
“We don’t see too many long positions in the ruble,” Sergey Fishgoyt, deputy head of foreign exchange at Otkritie Bank in Moscow, said by e-mail. “The market doesn’t look in panic, we will watch the continuing dynamics in the international markets.”
The Russian currency is more likely to weaken than strengthen against the dollar next week, Fishgoyt said.
Bank Rossii manages the ruble within a so-called “floating corridor” against a basket of dollars and euros to limit swings that erode exporters’ competitiveness. The current level against the basket implies the bank may be buying about $120 million a day in other currencies against the ruble, according to Otkritie’s estimates.
Bets on Weakening
Investors increased bets on the currency weakening, with non-deliverable forwards showing the ruble at 30.5817 per dollar in three months, compared with expectations of 30.4706 per dollar yesterday. The ruble was little changed at 39.0223 per euro and 34.1292 against the basket.
The yield on Russian Eurobonds due 2015 rose one basis point to 2.164 percent. Similar-maturity dollar-denominated notes from OAO Sberbank, the country’s largest lender, yielded nine basis points less than yesterday at 3.308 percent, while the yield on 2015 Eurobonds issued by state gas monopoly OAO Gazprom dropped five basis points to 3.47 percent.
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
