Ruble Weakens First Day in Three on Crude, Dividend Payments

The ruble weakened for the first time in three days against the central bank’s basket of currencies as oil fell and Russian companies bought foreign currency to pay dividends to holders of depositary receipts.

The ruble depreciated 0.1 percent to 37.7181 against Bank Rossii’s dollar-euro basket by 1:24 p.m. in Moscow. The Russian currency traded little changed against the dollar at 32.8580. The yield on benchmark OFZ bonds due February 2027 dropped three basis points, or 0.03 percentage point, to 7.70 percent.

Brent crude fell 0.6 percent to $108.27 a barrel. Income from oil and gas export comprise about a half of Russia’s budget revenue. Foreign currency demand for dividend payments may reach as much as $6 billion in August, Dmitry Dorofeev, an analyst at BCS Financial Group in Moscow, said in a note on July 26.

“We are seeing renewed pressure on the ruble against the basket,” Vladimir Kolychev, a strategist and economist at OAO Rosbank (ROSB) in Moscow, said in e-mailed comments. “There are still several weeks of relatively strong dividend- and holiday-related demand for hard currency that might keep the ruble recovery at a snail pace.”

The Russian central bank, which reports foreign-exchange interventions with a lag, spent the equivalent of 6.6 billion rubles ($200 million) in foreign currency on Aug. 1 buying rubles. Bank Rossii spent about the same amount a day from July 8 until the end of last month. On July 30 and July 31 it increased buying to 7.57 billion rubles and 8.12 billion rubles, respectively.

JPMorgan Chase & Co.’s Emerging Markets Currencies index rose 0.2 percent to 90.406.

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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