Ruble Rises to Strongest Since 2008 as Oil Lures Investors

Russia’s ruble touched a 27-month high against the dollar as investors bought assets of the world’s largest energy exporter on increasing oil prices and the prospect of faster economic growth.

The currency gained as much as 0.8 percent to 27.8475 per dollar by 12:06 p.m. in Moscow, the strongest since Dec. 18, 2008 on a closing basis. It also strengthened against the target basket used by the central bank to manage ruble swings, adding 0.3 percent to 33.6936. A close at that level would be the highest in 1 1/2 weeks.

The ruble has shrugged off last week’s 0.5 percent drop against the dollar, jumping 1.4 percent in the past two days as crude prices in New York reverse last week’s 2.8 percent slide. Oil prices, trading near their 30-month high in New York, will help Russia’s gross domestic product grow 4.2 percent in 2011, from 4 percent last year, and emerge fully from the global financial crisis by next year, Prime Minister Vladimir Putin told Russia’s lower house of parliament yesterday.

“We’re seeing a good convergence of factors which make the ruble attractive again,” Peter Rosenstreich, chief currency analyst at Swissquote Bank SA, said by e-mail from Geneva today. “Surging oil prices, optimistic growth expectations supported by Putin’s GDP announcement and a risk-on environment” are supporting appreciation, Rosenstreich said.

Crude gained as much as 0.9 percent to $112.48 a barrel today, the highest since April 11, as earnings results for companies including Apple Inc. beat analysts’ estimates and an Energy Department report showed an unanticipated drop in U.S. oil supplies. Urals crude, Russia’s chief export blend, rose for the first day this week, adding 2.1 percent to $119.47 a barrel.

Bonds

The ruble was little changed at 40.8025 per euro today. Bank Rossii buys and sells foreign currency to keep the ruble within a 32.45 to 37.45 so-called “floating corridor” against the basket, which is made up of about 55 percent dollars and the rest euros. The regulator seeks to temper the ruble’s fluctuations to protect Russian exporters.

The dollar slid against all but five of more than 20 emerging-market currencies tracked by Bloomberg, and hit a 15- month low versus the euro, as investors turned to countries that offer higher yields as well as bigger risk, according to Denis Korshilov, head of foreign-exchange trading in Moscow at Citigroup Inc.

“Overall weak U.S. sentiment is on the cards again,” Korshilov wrote in his e-mail.

The price on Russia’s debut ruble-denominated Eurobond rose for a third day, pushing the yield down two basis points, or 0.02 percentage point, to 6.92 percent, a six-day low. The government’s dollar debt due 2020 also advanced, leaving the yield three basis points lower at 4.88 percent, the least this week.

To contact the reporter on this story: Emma O’Brien in Moscow at eobrien6@bloomberg.net

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

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