Ruble Snaps Four Days of Losses Against Dollar as Oil Rallies

The ruble advanced for the first day in five against the dollar, paring its weekly loss as oil rose in New York.

Russia’s currency appreciated less than 0.1 percent to 30.8326 per dollar at the 7 p.m. close in Moscow, after earlier climbing as much as 0.4 percent. It lost 1.3 percent against the U.S. currency this week. The ruble declined 0.2 percent to 41.78 per euro, leaving it little changed at 35.7589 against the central bank’s target dollar-euro basket.

Crude futures in New York climbed 0.2 percent to $99.05 a barrel amid speculation that the European Central Bank buying Italian and Spanish bonds will stem surging borrowing costs, supporting the region’s demand for Russia’s biggest export earner. The yield on Italian 10-year bonds dropped 16 basis points, or 0.16 percentage point, to 6.68 percent, while similar-maturity Spanish notes declined eight basis points to 6.41 percent.

“The ruble has been surprisingly resilient” this week, Alexei Moiseev, chief economist at VTB Capital in Moscow, said by e-mail. “This seems to be due to a good supply of petrodollars to pay taxes as the tax period has just begun.”

Exporters convert revenues denominated in dollars and other currencies into rubles to pay taxes, bolstering the Russian currency. A total 578 billion rubles ($18.8 billion) in taxes were due to be paid between Nov. 15 and the end of the month, Alfa Bank wrote in an e-mailed note Nov. 16.

Russia’s $3.5 billion of Eurobonds due 2020 rose, pushing the yield down six basis points to 4.429 percent. Domestic ruble notes due July 2015 yielded four basis points more, at 7.99 percent.

Inflation

Russia’s central bank expects the ruble to strengthen toward the end of the year, Chairman Sergey Ignatiev told reporters in Moscow today. The currency’s 10 percent slump since the start of August may affect inflation next month, he said.

Investors pared bets that the Russian currency will weaken further, with non-deliverable forwards showing the ruble at 31.3076 per dollar in three months’ time, compared with expectations of 31.343 per dollar yesterday. VTB Capital expects the ruble to end 2011 0.5 percent weaker at 31 per dollar, Moiseev said.

To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net

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

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