The ruble headed for its longest losing streak since June 2012 as Bank Rossii introduced new measures to lower borrowing costs and crude oil sank.
The currency of the world’s biggest energy exporter slid for a sixth day, dropping 0.2 percent to 37.7212 against the dollar-euro basket by 10:51 a.m. in Moscow. The ruble depreciated 0.3 percent versus the dollar to 32.88 and by 0.2 percent against the euro to 43.64. The regulator sold the equivalent of 6.51 billion rubles ($198 million) of foreign currency on July 25, according to its website.
The central bank is accepting non-marketable assets as collateral for one-year loans today for the first time and the country’s biggest lenders are set to take all 500 billion rubles offered, according to OAO Rosbank (ROSB) and VTB Capital. Crude fell as much as 0.6 percent to $104.10 per barrel in New York today, the second day of declines. The oil and natural-gas industries contribute about 50 percent of Russia’s budget revenue.
“The ruble will continue to remain under pressure at the start of the week due to the expectations of Bank Rossii’s monetary easing, both in light of today’s auction and rate-cut bets,” Anton Zakharov, foreign-exchange and commodities analyst at OAO Promsbyazbank in Moscow, said by e-mail.
The drop in crude is also pushing the currency lower, Zakharov said. He expects the ruble to weaken to 33.37 versus the dollar by the end of the week.
Elvira Nabiullina, who took over the central bank on June 24, is offering banks longer and cheaper funds to help funnel cash into the economy needed to boost growth. Bank Rossii kept its main lending rates unchanged for a 10th month in her first decision as policy makers wait for inflation to drop within the target range of 5 percent to 6 percent.
The yield on so-called ruble OFZ bonds due January 2023 was steady at 7.37 percent.
Non-resident holdings of ruble-denominated sovereign notes are now approaching the emerging-market average of 30 percent, compared with 21 percent on Feb. 1 and 7 percent on July 1, 2012, the Moscow-based central bank said in a report on July 26. Bank Rossii and the Finance Ministry plan to start monitoring foreign ownership of OFZs to reduce risks.
JPMorgan Chase & Co.’s Emerging Currencies Index fell 0.2 percent to 90.844.
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