Bloomberg News

Ruble Strengthens First Day This Week on Rescue Fund Speculation

October 19, 2011

Oct. 19 (Bloomberg) -- The ruble appreciated against the dollar for the first day this week on speculation France and Germany have agreed to boost a rescue fund for the European Union, Russia’s largest trading partner.

The Russian currency strengthened 0.7 percent to 31.0200 per dollar at the 7 p.m. close in Moscow, its first gain since Oct. 14. The ruble was 0.1 percent weaker at 42.80 per euro, leaving it 0.2 percent higher at 36.3210 against the central bank’s target dollar-euro basket.

The London-based Guardian reported that Germany and France support quadrupling the size of Europe’s rescue fund, a sign demand for Russia’s exports may recover in the region. Urals crude, the country’s main oil blend, advanced 0.9 percent to $112.45 per barrel yesterday.

“External factors are playing the key role,” Maxim Oreshkin, the Moscow-based chief strategist for Russia and the former Soviet Union at Credit Agricole CIB, said by e-mail. “Markets everywhere have jumped on these rumors.”

Investors pared bets the ruble would weaken further, with non-deliverable forwards showing the currency at 31.4757 per dollar in three months.

Russia’s $3.5 billion of bonds due 2020 advanced, pushing the yield down 15 basis points, or 0.15 percentage point, to 4.596 percent. The yield on dollar debt due 2015 lost 12 basis points, to 3.203 percent.

--Editors: Linda Shen, Tim Farrand

To contact the reporters on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net; Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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