Bloomberg News

Ruble Weakens to Dollar, Extends Worst Quarter Since 2009

September 28, 2011

Sept. 28 (Bloomberg) -- The ruble weakened against the dollar, extending its worst quarter since 2009 as oil retreated amid concern the global recovery is faltering.

Russia’s currency depreciated 0.1 percent to 31.75 against the dollar by the 7 p.m. close in Moscow. The currency has depreciated 12 percent this quarter, the biggest drop since the three-month period ended March 2009.

Stocks in the U.S. and Europe fell on concern holders of Greek bonds will suffer larger losses than previously agreed. Urals crude, Russia’s main export blend, dropped 0.2 percent to $105.38 a barrel.

With “the global economy and demand for oil sagging, the prospects for a strong Russia look increasingly unlikely,” Peter Rosenstreich, chief currency analyst at Swissquote Bank SA in Geneva, said by e-mail.

The ruble has dropped 9.1 percent against the dollar this month. It was little changed at 43.2147 per euro today, leaving it down 0.1 percent at 36.9091 against the central bank’s target dollar-euro basket.

Investors pared bets the ruble will depreciate further, with non-deliverable forwards showing it dropping to 32.2065 in three months’ time, compared with 32.2124 yesterday. NDFs provide a guide to expectations of currency movements and interest-rate differentials.

There’s a “significantly higher” chance the ruble will strengthen rather than weaken against the dollar and euro in the coming weeks, Central Bank Chairman Sergey Ignatiev told reporters in Moscow yesterday. The bank is “entirely satisfied” with the parameters of the current corridor the central bank uses to smooth fluctuations in the ruble rate, he said.

Ignatiev’s “verbal intervention was a way to support the ruble and offset potential inflation pressures and general mass emerging-market migration,” Rosenstreich said.

--Editors: Alex Nicholson, Stephen Kirkland

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


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