Bloomberg News

Ruble Drops Most in 2 Months on Crude Oil Retreat, Tax Payments

September 26, 2012

The ruble dropped the most in two months as crude, Russia’s biggest export earner, retreated on concern the global economic recovery will founder.

The ruble weakened 1.3 percent to 31.3700 versus the dollar by 7 p.m. in Moscow, the most since July 23. The currency lost 0.4 percent versus the euro to 40.2666 and sank 0.9 percent against the central bank’s euro-dollar basket.

Crude in New York dropped after a report showed rising U.S. stockpiles and the Federal Reserve Bank of Philadelphia President Charles Plosser said a new stimulus plan probably won’t boost economic growth. The Bank of Spain said the country’s economy is shrinking at a “significant pace.”

“Externally, the ruble is influenced by the declining U.S. market and oil,” Alexey Pogorelov, an economist at Credit Suisse AG in Moscow, said by telephone. “Domestically, the corporate tax period is coming to an end.”

Russian companies have already bought the rubles they need to pay as much as 300 billion rubles ($9.6 billion) in mineral extraction taxes, he said.

The Finance Ministry sold 19.2 billion rubles ($615 million) of bonds due April 2017 at an average yield of 7.53 percent today, the Finance Ministry said on its website. The ministry offered 20 billion rubles of the notes at guidance of 7.5 percent to 7.55 percent, according to an announcement on its website yesterday. Demand at the high end of the guidance was 27 billion rubles, according to today’s statement.

Non-deliverable forwards showed the ruble at 31.8213 per dollar in three months compared with 31.4810 yesterday.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose four basis points to 214, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields compiled by the Micex fell four basis points to 7.569 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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