Bloomberg News

Ruble Snaps Three-Day Winning Streak to Dollar as Oil Declines

October 26, 2011

Oct. 26 (Bloomberg) -- The ruble depreciated against the dollar for the first day in four as oil, Russia’s main export earner, declined before today’s European Union summit addressing the region’s debt crisis.

The Russian currency lost 0.6 percent to 30.71 per dollar at the 7 p.m. close in Moscow, declining for the first day since Oct. 20. The ruble was little changed at 42.41 per euro, leaving it down 0.3 percent at 35.9750 against the central bank’s target dollar-euro basket.

Oil dropped in New York as leaders of the European Union, Russia’s largest trading partner, met in Brussels for an emergency meeting to discuss a potential Greek default that could engulf Italy and France and jolt the region’s banking system. Crude for December delivery declined 2.1 percent to $91.22 a barrel.

Investors increased bets the ruble would weaken further, with non-deliverable forwards showing it at 31.135 per dollar in three months, compared with 30.982 yesterday.

Russia’s $3.5 billion of bonds due 2020 rose for a fourth day, pushing the yield down nine basis points, or 0.09 percentage point, to 4.493 percent. Ruble notes due July 2015 yielded two basis points more at 7.99 percent.

Russia sold 9.7 billion rubles ($318 million) of ruble bonds due June 2015 today, according to a statement on the Finance Ministry’s website. The yield on those notes declined seven basis points to 7.89 percent, compared with the 7.9 percent to 7.95 percent guidance for the sale.

The country’s gross domestic product climbed 5.1 percent in the third quarter, Deputy Economy Minister Andrei Klepach told reporters in Moscow yesterday, the fastest rate since the three months through September 2008. That brought nine-month growth to 4.2 percent, or 0.1 percentage point ahead of the government’s full-year forecast.

--With assistance from Scott Rose and Alena Chechel in Moscow. Editors: Alex Nicholson, Linda Shen

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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