Ruble Falls to Month-Low on Dollar Demand, Bernanke Speech
The ruble retreated to the weakest level in almost a month as demand for dollars rose to make dividend payments to foreign owners and investors sold riskier assets before a speech from Federal Reserve Chairman Ben Bernanke.
Russia’s currency depreciated 1.2 percent against the dollar to 32.5800 at 7 p.m. in Moscow, falling a third day to the lowest since July 25. The ruble retreated 1.1 percent versus the euro to 40.7400 and slid 1.2 percent against the central bank’s currency basket.
Demand for dollars increased as Russian companies pay dividends, Anton Nikitin, an analyst with Moscow-based VTB Capital, said by phone today. Ruble demand fell as companies have made their month-end tax payments, he said. Emerging-market stocks fell after improved U.S. data dimmed prospects of Bernanke announcing additional stimulus measures in his address at a symposium in Jackson Hole, Wyoming.
“As a riskier asset, the ruble is largely dependent on external markets which have been in a lull awaiting Bernanke’s Jackson Hole address,” Nikitin said.
U.S. gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, data showed yesterday. Separate figures showed Americans signed more contracts to purchase previously owned homes in July.
Investors increased bets on the ruble weakening against the dollar, with non-deliverable forwards showing the currency at 33.0455 in three months versus 32.6615 yesterday.
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose one basis point to 223, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields compiled by Micex fell 7 basis points to 7.59 percent, data compiled by Bloomberg show.
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