Russian Government Bonds Rise 3rd Day Before September Inflation

Russian government bonds rose for a third day before inflation data for September that is forecast to show the pace of price increases slowed toward the central bank’s target.

The yield on ruble-denominated benchmark debt due February 2027 slipped one basis point, or 0.01 percentage point, to 7.63 percent. Russia’s currency traded little changed against the dollar at 32.1500 by 1:38 p.m. in Moscow, set for a 0.6 percent gain this week. It was also steady against Bank Rossii’s target basket of dollars and euros at 37.3714.

Russia’s annual inflation will probably accelerate to 6.2 percent, according to the median estimate of 14 economists in a Bloomberg survey. The rate was 6.5 percent in August. The central bank, which will hold its monetary policy meeting on Oct. 14 and may report its Consumer Price Index reading today, has a target of 5 percent to 6 percent for price increases in 2013.

“We see good chances for new support of long benchmark OFZ issues as data is released,” Evgeny Koshelev and Alexander Sychev, analysts at OAO Rosbank (ROSB), said in an e-mailed note. A moderation in inflation won’t change the possibility of interest rates being kept on hold at the meeting, “raising chances for monetary easing at subsequent meetings,” they said in the note.

Oil Climbs

Crude, Russia’s chief export earner, climbed 0.3 percent to $109.29 per barrel in London. An index of 20 emerging-market currencies compiled by Bloomberg rose for a fifth day, increasing 0.1 percent to 94.44.

Russia’s current-account surplus shrank to $1.1 billion in the third quarter, compared with $5.83 billion a year ago and below the median forecast of $8 billion in a Bloomberg survey of 7 economists. The net capital outflow from Russia was $12.9 billion over the three months through September, compared with $7 billion in the previous quarter, the central bank reported late yesterday in Moscow.

A worsening balance of payments has already been priced-in by the currency market, analysts at ZAO Raiffeisenbank led by Anastasia Baykova said in an e-mailed note. “In the absence of any considerable shocks on external markets we don’t think the pressure on the ruble will increase before the end of the year.”

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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