The ruble fell the most in two weeks on bets banks are selling the local currency and buying dollars to fund OAO Rosneft’s purchase of TNK-BP, the country’s third-largest oil company.
The ruble sank 0.7 percent, the biggest drop since Oct. 8, against the dollar at 31.0585 by the 7 p.m. close in Moscow, the worst performing among emerging-markets currencies tracked by Bloomberg. The ruble fell 0.9 percent versus the euro to 40.5900. It was down 0.8 percent against the central bank’s euro-dollar target basket.
Rosneft agreed to buy BP’s half of the TNK-BP oil venture for $26.8 billion in cash and shares, according to a statement today. Russia’s largest oil company also agreed to acquire the other half of TNK-BP from its billionaire shareholders for $28 billion in cash.
“It is about the Rosneft and TNK-BP deal,” Igor Akinshin, a currency trader at Moscow-based OAO Alfa Bank, said by phone. “The thought is that a lot of dollars will be bought for this deal and that is what’s playing in the market.”
Non-deliverable forwards showed the ruble at 31.5375 per dollar in three months compared with 31.3320 on Oct. 19.
The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries fell five basis points 169, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields added two basis points to 6.9969 percent.
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