The ruble sank for the first week in three as Urals crude, Russia’s main export, dropped to a 1 1/2- year low and Moody’s downgraded 15 global banks’ credit ratings.
The Russian currency depreciated 0.9 percent to 33.27 per dollar by the close in Moscow, giving it a 2.3 percent drop in the week. Russia’s 132 billion rubles ($3.9 billion) of bonds due April 2021 slid, raising the yield six basis points, or 0.06 percentage point, to 8.64 percent.
Urals crude sank 1.3 percent to $86.52 per barrel, the lowest price since November 2010. Prime Minister Dmitry Medvedev ordered the government to prepare a budget plan based on a $60 oil price, Vedomosti reported yesterday, citing two officials familiar with the plan.
“The only reason is fear,” Aleksey Kulakov, a Moscow- based currency trader at OAO Promsvyazbank, said by e-mail. “When people hear that the government’s preparing for oil at $60 per barrel, they can only run to buy dollars.”
The MSCI Emerging Markets Index (MXEF) of stocks retreated 1.7 percent after Moody’s downgraded Morgan Stanley, Credit Suisse Group AG and 13 other banks yesterday. European stock futures fell as German business confidence declined to its lowest in more than two years.
The ruble depreciated 0.3 percent to 41.7225 per euro and 0.6 percent to 37.0736 against the central bank’s target dollar- euro basket. Investors increased bets on the currency weakening, with non-deliverable forwards showing the ruble at 33.7801 per dollar in three months, compared with expectations of 33.6105 per dollar yesterday.
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