The ruble retreated for a third day against the central bank’s target dollar-euro basket as foreign direct investment into China slumped, hurting demand for riskier assets. Urals crude declined.
The Russian currency depreciated 0.2 percent to 33.7535 against the basket as of 5:05 p.m. in Moscow, heading for the weakest close since April 11. The ruble was little changed at 29.5751 per dollar and lost 0.5 percent to 38.8625 per euro.
Foreign direct investment in China retreated 6.1 percent in March from a year earlier, a fifth monthly fall, according to data from the Ministry of Commerce today. Data showed last week China’s economy expanded the least in almost three years in the first quarter. Urals crude, Russia’s main oil blend, slipped 0.4 percent to $114.25 per barrel.
Falling oil and equities are helping drive the ruble’s losses, according to Sergey Fishgoyt, deputy head of foreign exchange at Otkritie Bank in Moscow. “A correction is more possible than some players think, especially as we see new headlines from Europe and China which are negative,” he said in an e-mail.
The Micex Index of Russian stocks lost 0.5 percent to 1,470.90. Investors increased bets on the ruble weakening, with non-deliverable forwards showing the ruble at 29.9628 per dollar in three months, compared with expectations of 29.922 per dollar yesterday.
Russia’s $2 billion of Eurobonds due April 2015 rose for a second day, pushing the yield down eight basis points, or 0.08 percentage point, to 2.173 percent. Dollar-denominated notes due the same year from OAO Sberbank, Russia’s largest lender, yielded 17 basis points less than yesterday at 3.665 percent, while the yield on 2015 Eurobonds from state gas monopoly OAO Gazprom declined seven basis points to 3.471 percent.
The cost of protecting Russian debt against non-payment for five years using credit-default swaps fell three basis points to 200 basis points, down from last year’s peak of 338 on Oct. 4, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
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