Russia’s government bonds fell for a third day and the Finance Ministry failed to sell out an auction of its shortest securities as investors awaited the publication of minutes from the last U.S. Federal Reserve meeting.
The yield on the government’s ruble debt due February 2027 rose nine basis points, or 0.09 percentage point, to 7.98 percent, the highest on a closing basis since June 26. The ruble depreciated less than 0.1 percent to 38.0547 against the central bank’s euro-dollar basket by 6 p.m. in Moscow, when the regulator ceases its open market operations.
Currencies and debt from Indonesia to South Africa weakened ahead of the Federal Open Market Committee’s publication today of its July meetings as investors speculated the U.S. will pare stimulus. Russia’s Finance Ministry sold 6.37 billion rubles ($193 million) out of 10 billion rubles of three-year notes auctioned, snapping three sellouts of the securities.
“People are waiting for America,” Evgeny Shilenkov, head of trading at Veles Capital in Moscow, said by phone. “Right now it’s not the best time to buy.”
Oil in London declined by 0.3 percent to $109.79 per barrel. The oil and natural gas industries generate about 50 percent of Russia’s government revenue.
The government has placed 37.2 billion rubles of new debt in the first three weeks of August with an average maturity of 5.7 years compared with 68.3 billion rubles and a maturity of 8.6 years in August 2012, according to OAO Gazprombank.
‘This August is hardly an auspicious month’’ for the Finance Ministry, which officially plans to borrow 270 billion rubles in the third quarter, analysts including Ekaterina Zinovyeva said in e-mailed comments.
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 13.5 percent in the same period, while the Indonesian rupiah has weakened by 9.4 percent.
Bank Rossii has spent 369 billion rubles on market interventions since May 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 33.0255 today and advanced 0.1 percent against the euro to 44.2045.
“If not for the central bank interventions, it’d be lower against both the dollar and the euro,” Anton Zakharov, money manager at OAO Promsvyazbank in Moscow, said by e-mail.