The ruble weakened against the Russian central bank’s target basket as oil, the country’s biggest export earner, declined.
The currency depreciated 0.1 percent versus the dollar-euro basket to 34.8812 by 7 p.m. in Moscow. It was 0.3 percent lower at 30.7155 to the dollar and was little changed at 39.9725 against the euro. Yields on benchmark government ruble bonds due February 2027 added four basis points, or 0.04 percentage point, to 7.29 percent.
Crude oil futures fell 0.7 percent to $110.87 a barrel in London after a 1.4 percent jump on Tuesday, the strongest one- day increase since Dec. 26. The ruble continues to trade in a “tight range” of 34.65 to 35.00 against the basket as Bank Rossii intervenes to rein in its appreciation and a high current account limits its weakness, according to Alfa Bank.
“We need fundamental reasons to drive us out of this range,” Igor Akinshin, a foreign exchange trader at Alfa Bank, said by phone.
Bank Rossii is forecast to cut the overnight repurchase rate from 5.5 percent by a quarter point in the third quarter after keeping its key borrowing costs unchanged since a quarter- point increase in September, according to the median of 17 estimates in a Bloomberg survey.
President Vladimir Putin is considering candidates to head the central bank as he must name a replacement for Sergey Ignatiev, 65, three months before the current chairman’s third and final term ends in June.
“Ninety-five percent of market participants, traders, economists think that whoever is the new head of the central bank, he immediately lowers the rates,” Akinshin said. “That’s the fundamental story for the ruble.”
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