Bloomberg News

Ruble Weakens First Day in Three as Italy Vote Curbs Risk Wagers

November 07, 2011

Nov. 7 (Bloomberg) -- The ruble declined for the first day in three against the dollar as investors pared bets on riskier assets amid concern Europe’s debt crisis will drag on.

The Russian currency lost 0.2 percent to 30.565 per dollar as of 10:11 a.m. in Moscow, its first drop since Nov. 1. The ruble was little changed at 42.075 per euro, leaving it steady at 35.7473 against the central bank’s target dollar-euro basket.

Italy’s parliament will vote tomorrow on the 2010 budget report amid an unraveling of Prime Minister Silvio Berlusconi’s majority and a surge in the nation’s borrowing costs. Greek Prime Minister George Papandreou agreed to step down as a new government is created to secure international financing and avert a collapse of its economy. The European Union is Russia’s largest trading partner.

The yield on Italian debt due in two years jumped 24 basis points, or 0.24 percentage point, to 5.463 percent Nov. 4, the highest since at least April 2003.

Russia’s $3.5 billion of bonds due 2020 rose, pushing the yield down 16 basis points to 4.189 percent. Domestic ruble bonds due August 2016 yielded 24 basis points more, at 8.22 percent.

Investors increased bets the ruble would weaken further, with non-deliverable forwards showing the currency at 31.0055 per dollar in three months, compared with 30.9575 Nov. 4.

--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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