The ruble weakened to the lowest level in four years and Russia’s government bonds fell as oil and emerging-market currencies sank ahead of the publication of minutes from the last U.S. Federal Reserve meeting.
The ruble depreciated 0.1 percent to 38.0594 against the central bank’s euro-dollar basket, the weakest since August 2009 on a closing basis, by 1:01 p.m. in Moscow. The yield on the government’s ruble bond due February 2027 rose four basis points, or 0.04 percentage point, to 7.93 percent, the highest since July 5.
Currencies from Indonesia to South Africa weakened amid prospects the U.S. Federal Reserve will pare stimulus. The Federal Open Market Committee publishes minutes today of its July meeting, with 65 percent of economists surveyed by Bloomberg News predicting the Fed will taper bond purchases in September. Brent oil declined by 0.8 percent to $109.31 per barrel. The oil and natural gas industries generate about 50 percent of Russia’s government revenue.
“The ruble’s getting sold along with other emerging-market currencies as global investors lose appetite,” Anton Zakharov, money manager at OAO Promsvyazbank in Moscow, said by e-mail.
The ruble is the 12th best performer against the dollar among 24 emerging market currencies in the last three months with a 5.5 percent decline. India’s rupee has lost 14 percent in the same period, and the Indonesian rupiah has weakened by 9 percent.
Bank Rossii has spent 369 billion rubles ($11 billion) on market interventions since 29 to prevent excess volatility in the currency. The regulator has also raised its managed floating band for the ruble to 32.00-39.00 rubles versus the basket from 31.65-38.65 in the past two months.
The Russian currency slid 0.2 percent against the dollar to 3.0220 today and traded little changed against the euro at 44.2230.
“If not for the central bank interventions, it’d be lower against both the dollar and the euro,” Zakharov added.
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