The ruble strengthened the most in almost four weeks as oil traded close to a five-year high and the Russian central bank continued to buy the local currency.
The ruble advanced 0.3 percent to 38.0748 versus the central bank’s euro-dollar basket by 6 p.m. in Moscow, poised for its strongest gain on a closing basis since Aug. 2. The yield on the government’s ruble debt due February 2027 fell two basis points, or 0.02 percentage point, to 8.05 percent.
Brent oil pared declines to trade down 0.5 percent at $116.03 a barrel. It rallied more than 5 percent in the two previous days to reach the highest level since August 2008. Russia’s central bank sold 13.27 billion rubles ($399 million) of foreign currency on Aug. 27, bringing the total amount spent since May 29 to almost 432 billion rubles.
“The main reasons are the central bank interventions and oil,” Sergey Fishgoyt, deputy head of foreign exchange trading at Bank Otkritie said by e-mail.
After the central bank raised the ruble corridor 5 kopeks to 32.10-39.10 from Aug. 27, the regulator may be selling $200 million per day when the ruble is stronger than 38.10 versus the basket and $400 million when it’s weaker, according to Fishgoyt.
“We get the feeling that the ruble is speculatively oversold,” Fishgoyt said.
The ruble weakened 0.1 percent against the dollar to 33.2300 and advanced 0.7 percent against the euro to 44.
With the central bank offering $7 billion to $8 billion in the foreign exchange market a month, the ruble may continue to outperform other emerging-markets currencies, VTB Capital analysts Maxim Korovin and Anton Nikitin said in an e-mailed note. The ruble has lost 11 percent in spot terms from this year’s peak compared with drops of more than 15 percent for the Brazilian real, Turkey lira and South African rand, they said.
“We do not see any reasons for the ruble to follow the same disorderly depreciation path as rupee and rupiah,” Korovin and Nikitin said.