Bloomberg News

Ruble Gains Versus Dollar, Paring Weekly Loss on Europe Talks

October 21, 2011

Oct. 21 (Bloomberg) -- The ruble climbed, paring its first weekly drop in three, as the possibility of a $1.3 trillion deployment to fight Europe’s debt crisis buoyed appetite for riskier assets.

The Russian currency strengthened 1 percent to 31.0350 per dollar at the 7 p.m. close in Moscow, paring its first weekly drop in three to 0.5 percent. The ruble weakened 0.5 percent to 43.16 per euro.

Euro-area leaders will meet twice next week to discuss their response to the debt crisis, including a plan to provide $1.3 trillion. Crude oil, Russia’s chief export earner, added 2.3 percent to $88.05 a barrel, while Urals, the country’s main export blend, slipped 0.2 percent to $109.53 a barrel after a 1.1 percent jump yesterday.

Investors pared bets the ruble will weaken further, with non-deliverable forwards showing it at 31.5533 per dollar in three months’ time. The ruble’s movements against the euro and the dollar left it 0.2 percent stronger at 36.4912 against the central bank’s dollar-euro basket, which the regulator targets to smooth exchange-rate fluctuations that can hurt exporters.

Bank Rossii manages the ruble against a so-called floating corridor that currently stands at 32.70 to 37.70 against the basket, First Deputy Chairman Alexei Ulyukayev told reporters in Moscow Oct. 10. Ulyukayev reiterated the weaker end of the band in comments to reporters in Moscow yesterday.

Russian dollar bonds due 2015 rose, pushing the yield down five basis points, or 0.05 percentage point, to 3.326 percent. Dollar debt due 2020 yielded seven basis points less than yesterday, at 4.639 percent.

--With assistance from Jack Jordan in Moscow. Editors: Linda Shen, Ana Monteiro

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net

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


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