Bloomberg News

Ruble Rises for 3rd Day, Eurobond Yields Fall on Oil Gain

June 06, 2012

The ruble had its biggest three-day gain on record against the dollar as oil rose and the central bank said it intervened to support the local currency.

The ruble climbed 1.8 percent to 32.42 per dollar by the 7 p.m. close in Moscow, taking its three-day advance to 3.9 percent, the most since at least 2003, data compiled by Bloomberg show. The country’s $2 billion of bonds due 2022 rose, cutting the yield 21 basis points, or 0.21 percentage point, to 4.188 percent.

The central bank sold about $200 million of foreign currency a day in the past three days to slow the ruble’s decline, First Deputy Chairman Sergey Ignatiev said in St. Petersburg today. Brent crude climbed 2.1 percent to $100.94 per barrel after the industry-funded American Petroleum Institute said yesterday that inventories fell 1.8 million barrels last week, a sign demand may rise.

“The central bank is willing to spend more dollars” to support the ruble, Andrey Kostin, chief executive officer of VTB Group, Russia’s second-largest lender, said in an interview on Bloomberg TV. “I am not expecting the ruble to depreciate further.”

The ruble gained 1.4 percent to 40.585 per euro and 1.6 percent to 36.0942 against the central bank’s target dollar-euro basket. Investors pared bets on the currency weakening, with non-deliverable forwards showing it at 32.9356 per dollar in three months, compared with expectations of 33.528 per dollar yesterday.

The yield on Russian Eurobonds due 2015 fell 12 basis points to 2.306 percent. Similar-maturity dollar-denominated debt from OAO Sberbank, Russia’s largest lender, yielded 11 basis points less than yesterday at 3.868 percent, while the yield on 2015 Eurobonds issued by state gas monopoly OAO Gazprom dropped 23 basis points to 3.849 percent.

The cost of insuring Russian Eurobonds against nonpayment over five years using credit default swaps fell 19 basis points to 262 basis points, the biggest daily decline since Nov. 30.

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

June 6 (Bloomberg) -- Andrei Kostin, chief executive officer of VTB Group, talks about Russia's banks, the ruble and Greece. He speaks on the sidelines of a World Economic Forum meeting in Istanbul with Francine Lacqua on Bloomberg Television's "The Pulse." (Source: Bloomberg)

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