The ruble rebounded from the lowest level in almost four years after oil jumped and VTB Capital recommended buying the currency as Russia’s central bank slows declines with stronger interventions.
The ruble dropped 0.7 percent against the central bank’s dollar-euro basket to 37.5602 by 1:15 p.m. in Moscow, rallying from the weakest close since September 2009. The ruble is down 2.9 percent in the week, heading for its steepest five-day slump since June 3 last year.
Russia’s bonds and currency joined a global rout yesterday after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank may cut bond purchases that have fueled asset-price gains, and end the program in 2014 should risks to the U.S. economy abate. After the ruble’s recent selloff the central bank might increase its daily interventions to about $400 million from about $200 million on June 18 and June 19, VTB Capital analysts Maxim Korovin and Anton Nikitin said.
“Interventions would provide strong resistance against a weaker ruble in the short term,” they wrote in an e-mailed note, recommending investors sell the dollar and basket against the ruble.
The central bank has spent the equivalent of 58.6 billion rubles ($1.8 billion) of foreign currency since May 29 to curb the ruble’s slide. Bank Rossii, which reports currency intervention data with a delay and steps up interventions if the ruble weakens beyond certain levels, spent the equivalent of 6.43 billion rubles on June 19.
Brent oil rose 0.8 percent to $102.92 per barrel after tumbling 3.7 percent yesterday. Crude and natural gas provide about 50 percent of Russian state revenue.
The ruble strengthened 0.7 percent to the dollar to 32.8235, giving it a 3.4 percent loss in the last five days, the sixth-worst performance among 24 emerging-market currencies tracked by Bloomberg.
The ruble’s three-month volatility rose two basis points to 11.4975, the highest since October 2012, data compiled by Bloomberg show.
The yield on benchmark OFZ bonds due February 2027 declined three basis points, or 0.03 percentage point, to 7.96 percent.
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