Ruble Weakens Against Target Basket for Fifth Day After Elections Tension

The ruble depreciated for a fifth day against the central bank’s target dollar-euro basket after hundreds of arrests at anti-government protests late yesterday.

Russia’s currency lost 0.3 percent to 36.0475 against the basket at the close in Moscow after dropping 0.3 percent to 41.85 per euro and 31.2999 per dollar. Ruble bonds due July 2015 fell for a second day, pushing the yield up seven basis points, or 0.07 percentage point, to 7.85 percent.

Police said they detained about 300 people yesterday at an unsanctioned rally in downtown Moscow to protest the results of Dec. 4 parliamentary elections.

“We could expect the market perception towards Russia to be rather negative until the end of the election campaign” in March, Nikolay Podguzov, head of fixed-income strategy at VTB Capital in Moscow, said by e-mail. “It’s not about the facts. Western media prefer to present these kinds of event in Russia in a most sensational way.”

Investors pared bets the ruble would weaken further against the dollar, with non-deliverable forwards showing the currency at 31.7151 per dollar in three months, compared with expectations of 31.735 per dollar yesterday. The country’s dollar Eurobond due in 2020 rose, pushing the yield down 25 basis points to 4.419 percent.

Oil, Russia’s main export earner, lost 0.8 percent to $100.49 a barrel in New York crude futures trading.

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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