June 29 (Bloomberg) -- The ruble climbed to the strongest level in a week on bets Greece’s debt crisis will abate, spurring demand for riskier assets.
Russia’s currency appreciated for a second day, gaining 0.6 percent to 27.975 per dollar by the 5 p.m. close, which came before the Greek vote ended and was the strongest since June 21. The ruble was little changed against the euro at 40.3519, leaving it 0.3 percent stronger versus the central bank’s target dollar-euro basket at 33.5446.
The Greek parliament passed Prime Minister George Papandreou’s 78 billion-euro ($112 billion) austerity plan, needed before the cash-strapped nation can tap a fifth installment from last year’s 110 billion-euro rescue and euro- area finance ministers can approve a second aid package.
“Market sentiment has lifted,” Thu Lan Nguyen, a currency strategist at Commerzbank AG in Frankfurt, said in response to e-mailed questions today. “Progress on a new aid package is being made, which was taken positively by markets.”
Commerzbank predicts “some short- to medium-term strengthening” of the ruble due to rising oil prices, “which will, however, ease considerably by the end of the year,” Nguyen said. The ruble will trade at 33.5 against the basket by the end of 2011, Nguyen said.
Oil, Russia’s chief export earner, rose as much as 0.4 percent today, trading at $93.22 a barrel.
Russian government bonds advanced for a second day, lowering the yield on dollar debt due in 2015 by ten basis points to 2.893 percent, according to data compiled by Bloomberg. The yield on the country’s ruble Eurobond was little changed at 6.987 percent.
Non-deliverable forwards, which allow companies to hedge against currency movements, show the ruble at 28.2593 per dollar in three months, compared with 28.3667 yesterday.
--With assistance from Maria Levitov in London. Editors: Alex Nicholson, Linda Shen
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