Bloomberg News

Ruble Climbs to 2-Month High, Bond Yields Drop After Crude Gain

August 06, 2012

The ruble strengthened to the highest level against the dollar in more than two months and yields on Russia’s international debt fell after a rise in Urals crude oil, the country’s main export.

The Russian currency gained 1.3 percent to 31.5901 per dollar by the close in Moscow, the highest level since May 22. The country’s $2 billion of Eurobonds due April 2015 advanced, cutting the yield by six basis points, or 0.06 percentage point, to 1.834 percent.

Urals crude jumped 3 percent to $109.81 per barrel on Aug. 3, the highest level since May 15, after reports showed U.S. payrolls rose more than estimated and service industries expanded at a faster pace. The oil blend traded at $109.06 per barrel today. Oil and gas together contribute about 50 percent of Russia’s state revenue, according to the government’s estimates.

“The local market seems balanced, while international demand for the ruble on the back of last week’s events is strong,” Mikhail Palei, a Moscow-based currency trader at VTB Capital, said by e-mail.

The ruble rose 0.7 percent to 39.1702 per euro and 1 percent to 35.0011 against the central bank’s target dollar-euro basket. Investors pared bets on the currency weakening, with non-deliverable forwards showing the ruble at 32.0614 per dollar in three months, compared with expectations of 32.4875 per dollar on Aug. 3.

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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