Ruble Weakens on Declining Oil as Interest Rate Left Unchanged

The ruble slumped for the first time in three days against the central bank’s target basket of currencies after Russian policy makers left interest rates unchanged and oil fell.

The ruble weakened 0.2 percent against Bank Rossii’s basket of dollars and euros to 35.5898 by 6 p.m. in Moscow and lost 0.5 percent against the dollar to 31.5225. Yields on benchmark OFZs due February 2027 rose two basis points, or 0.02 percentage point, to 6.95 percent.

Bank Rossii kept its main interest rates unchanged for an eighth month, as forecast by 18 out 24 economists surveyed by Bloomberg. The regulator reduced some mid-term and long-term rates on refinancing, backed by gold and non-marketable assets, by 25 basis points. Brent oil extended declines for a fourth day, trading in London down 0.9 percent at $101.72 per barrel.

The ruble “reacted slightly to the central bank decision and oil, which is down,” Artem Roschin, a foreign-exchange trader at Aljba Alliance LLC, said by phone from Moscow. “Combined it put a lid on us. The reaction fits the decision.”

The interest rate implied from three-month non-deliverable dollar-ruble forward contracts rose one basis point to 6.43 percent, six points below the 2013 closing high on March 22.

The regular tax period, which is traditionally supportive for the ruble as exporters sell their foreign-currency revenue to pay ruble taxes, started today and will continue until May 31.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

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

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