Bloomberg News

Ruble Extends Losing Streak to Longest Since 2009 as Oil Slumps

May 18, 2012

The ruble depreciated against the dollar for an 11th day, extending its losing streak to the longest in more than three years as oil declined and after a report showed weaker-than-expected Russian industrial growth.

The Russian currency lost 0.6 percent to 31.25 per dollar by the close in Moscow, taking its weekly loss to 3.3 percent, the steepest since September. The ruble declined 0.7 percent to 39.7475 per euro and 0.7 percent to 35.0739 against the central bank’s target dollar-euro basket.

Urals crude sank 0.5 percent to $106.31 per barrel after Greece was downgraded by Fitch Ratings and Moody’s Investors Service cut 16 Spanish banks, stoking concern Europe’s debt crisis will worsen. The European Union is Russia’s largest trading partner.

“The conditions are ripe for the ruble to revisit 36 against the basket,” Benoit Anne, head of emerging-market strategy at Societe Generale SA in London, said by e-mail. “Oil prices are virtually in freefall along with risk indicators.”

Russian industrial production increased by 1.3 percent last month from a year earlier, the Federal Statistics Service in Moscow said in an e-mailed statement yesterday, the weakest pace since it started rising in November 2009. The median estimate of 15 economists in a Bloomberg survey showed expectations of 3.2 percent growth.

The output report “is clearly going to raise questions about the growth story for the period ahead,” Anne said.

Investors increased bets on the ruble weakening further, with non-deliverable forwards showing the currency at 31.7621 per dollar in three months, compared with expectations of 31.5805 per dollar yesterday.

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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