Ruble Weakens Most This Month on Crude Oil Slide, Economy Woes

The ruble fell the most this month, as oil, Russia’s main export earner, dropped amid speculation an economic slowdown in Asia will curb fuel demand.

The ruble declined 0.9 percent percent to 31.1600 against the dollar by 7 p.m. in Moscow, the most since Sept. 26. The Russian currency slipped 0.4 percent versus the euro to 40.4200 and retreated 0.7 percent against the central bank’s target euro-dollar basket.

Crude oil in New York sank as much as 1.9 percent before trading down 0.3 percent at $89.64 per barrel. Economic growth in developing East Asia, including China, will be the slowest since 2001, according to the World Bank. Russia’s central bank kept its key interest rates on hold last week.

“The falling oil price along with disappointment from some investors over Russia’s central bank leaving key rates unchanged prevented the ruble from further appreciation,” Sergey Fishgoyt, deputy head of foreign exchange at Otkritie Financial Corp. in Moscow, said by phone today.

The ruble rose at the end of last week after the European Central Bank reiterated its pledge to buy government bonds and help ease borrowing costs in the region.

Non-deliverable forwards showed the ruble at 31.6143 per dollar in three months compared with 31.3597 on Oct. 5.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries fell one basis point to 186, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields fell nine basis points to 7.416 percent.

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