Ruble Heads for Best Streak of Gains Since March as Embargo Boosts Crude

The ruble advanced for a sixth day, extending its longest winning streak since March against the dollar after European Union diplomats agreed to place an embargo on Iranian oil imports, lifting the price of Russia’s main export earner.

The currency gained 1.4 percent to 30.89 per dollar at the 7 p.m. close in Moscow, its biggest advance since Nov. 30. The ruble added 0.6 percent to 40.2625 per euro and rose 1 percent to 35.1076 against the central bank’s target dollar-euro basket.

European Union foreign ministers will ban oil imports from Iran starting July 1 as part of measures to ratchet up the pressure on the Persian Gulf nation’s nuclear program, Dutch Foreign Minister Uri Rosenthal said. Crude jumped 1.3 percent to $99.73 a barrel in New York.

“The oil story is giving the ruble a boost,” Peter Rosenstreich, chief currency analyst at Swissquote Bank SA in Geneva, said by e-mail. “If oil prices increase, net capital outflows should decline.”

Capital outflows surged to $37.8 billion in the fourth quarter, compared with $33.6 billion for all of 2010. More money has probably been taken out of the country this month, Alexei Ulyukayev, first deputy chairman of Russia’s central bank, told reporters in Moscow Jan. 19.

The ruble is also being supported by tax payments that may total 600 billion rubles ($19 billion) this week, Alexei Moiseev, chief economist at VTB Capital in Moscow, said by e- mail. Exporters convert revenues in other currencies into rubles to pay the government, raising demand for the Russian currency.

The yield on Russia’s $3.5 billion of bonds due 2020 fell five basis points, or 0.05 percentage point, to 4.419 percent. Ruble bonds due in 2021 retreated, pushing the yield up one basis point to 8.37 percent.

The ruble has advanced 4.1 percent against the dollar in 2012 after depreciating the most since 2008 last year. Brazil’s real has climbed 6.2 percent this year, India’s rupee gained 6.3 percent and China’s yuan declined 0.2 percent.

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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