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Ruble Weakens to Dollar After Spain Downgrade Stokes Economy Woe

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June 14 (Bloomberg) -- The ruble depreciated for the first day in three after Moody’s Investors Service downgraded the debt ratings of Spain and Cyprus.

The Russian currency lost 0.5 percent to 32.5975 per dollar by the close in Moscow. The ruble lost 0.7 percent to 41.0502 per euro and 0.6 percent to 36.4012 against the central bank’s target dollar-euro basket.

Moody’s cut Spain’s rating three steps to Baa3 yesterday, two levels below Russia’s level of Baa1, signaling Europe’s debt crisis is deepening. The ratings service lowered Cyprus’s rating to Ba3 from Ba1. Brent crude dropped 0.5 percent to $96.62 per barrel, its sixth day of losses.

“The ruble’s weakness mainly came from oil falling,” Igor Akinshin, a currency trader at Alfa Bank in Moscow, said by e-mail. “The fundamentals are not looking good.”

The ruble’s declines were limited today by companies preparing for monthly tax payments, Akinshin said. Exporters convert revenue from abroad into rubles to pay the Russian government in the second half of every month, boosting the currency.

Investors increased bets on the currency weakening, with non-deliverable forwards showing the ruble at 33.1250 per dollar in three months.

To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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