Ruble Strengthens for First Time in Three Days as Oil Advances

The ruble strengthened for the first gain in three days against the central bank’s target basket as oil, Russia’s biggest export, advanced.

The Russian currency added 0.1 percent against the dollar- euro basket to 34.9132 by 4:41 p.m. in Moscow. The ruble was 0.2 percent stronger at 30.7198 against the dollar. Yields on benchmark government ruble bonds due Feb. 2027 rose two basis points, or 0.02 percentage point to 7.24 percent.

Crude oil futures increased 0.2 percent to $90.33 a barrel in New York, earlier rising to $90.70. Oil and natural gas exports contribute about 50 percent of Russia’s government revenue. Emerging-market currencies and stocks strengthened as China maintained its economic growth target and investors speculated exporters will get a boost from U.S. monetary stimulus.

The Russian currency is mainly supported by a surplus on the current account, provided by a still high oil price and moderate growth in imports, ZAO Raiffeseinbank analysts led by Denis Poryvay said in note to clients, adding they expect minimal fluctuations in the ruble rate in March.

“For ruble to strengthen we should first see a substantial positive correction in the oil price, as well as higher non- residents’ activity on the debt market,” Raiffeisenbank analysts said.

The ruble’s performance since the start of 2013 remains strong to developing-nation peers, and if oil prices don’t provide support, “we might see ruble catching other emerging markets currencies,” VTB Capital analysts Maxim Korovin and Anton Nikitin said in note to clients.

They said a ruble decline to below 35.00 per basket is possible before tax flows materialize at the end of March.

Russian companies will pay about 950 billion rubles ($31.7 billion) during a tax period from March 15 to March 28, according to estimates of Alexander Morozov, chief economist at HSBC Plc’ Russian subsidiary, published in a March 4 report.

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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