Bloomberg News

Ruble Drops First Time in 2 Weeks on Speculation Gains Overdone

September 17, 2012

The ruble retreated for the first time in almost two weeks, paring its biggest rally since 2010, as investors bet the currency’s gains were overdone.

The Russian currency lost 0.4 percent to 30.5900 per dollar at 7 p.m. in Moscow. It slid 0.3 percent versus the euro at 40.1950 and 0.3 percent against the central bank’s target euro- dollar basket.

The ruble’s slide snapped a nine-day winning streak. The U.S. Federal Reserve said Sept. 13 it will purchase $40 billion of mortgage debt a month and hold the federal funds rate near zero through mid-2015, spurring appetite for riskier emerging- market assets. That followed an earlier promise of unlimited bond-purchases by the European Central Bank.

“As the ruble lost potential for further strengthening, some investors chose to buy back the foreign currency,” Alexey Egorov, an analyst at Nomos Bank in Moscow, said by e-mail.

Non-deliverable forwards showed the ruble at 31.0275 per dollar in three months compared with 30.7197 on Sept. 14.

The ruble’s rally last week was helped by speculation the currency would strengthen as investors bought rubles to buy the stock of OAO Sberbank, Russia’s biggest lender, which announced its share sale today, Sergey Fishgoyt, deputy head of foreign exchange at Otkritie Financial Corp., said by e-mail.

At the same time, most of the shares will be sold abroad, Fishgoyt said. “There will be no need to snap up rubles for that,” he said.

$5.1 Billion

Bank Rossii is offering the equivalent of 1.71 billion shares in ordinary and global depositary stock at a range of 91 rubles to the market price at the time the order book closes, the central bank and Sberbank said in a statement today. A sale at the low end of the range would raise 156 billion rubles ($5.1 billion). Sberbank’s shares closed at 96.99 rubles on Sept. 14.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose 6 basis points to 191, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five- year government bond yields compiled by the Micex was up 3 basis points at 7.552 percent.

To contact the reporter on this story: Lyubov Pronina in London at lpronina@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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