The ruble pared its strongest monthly advance in a year as crude oil fell on speculation the U.S. government is heading for a shutdown that could reduce demand.
The currency of the world’s biggest energy exporter declined 0.2 percent to 37.5525 against the central bank’s target dollar-euro basket by 6 p.m. in Moscow, heading for a 1.5 percent gain in the month and a 0.8 percent drop in the quarter. The yield on government 10-year bonds rose five basis points, or 0.05 percentage point, to 7.32 percent, the highest in more than a week.
Crude, Russia’s main export earner, slid 1 percent in London to $107.54 a barrel, the lowest since Aug. 12. Congress is scheduled to meet today to attempt to end a stalemate that raises the risk of the first government shutdown in 17 years and threatens talks to increase the debt limit. An index of 20 emerging-market currencies compiled by Bloomberg retreated 0.1 percent to 93.64 today.
“Weak oil and currencies of other emerging countries made the ruble virtually give up more than half of what it has gained in the beginning of the month,” Vladimir Miklashevsky, trading desk strategist at Danske Bank S/A in Helsinki, said in e-mailed comments.
The ruble rallied 5.7 percent against the dollar in the 10 days through Sept. 19, as the the Federal Reserve unexpectedly maintained its stimulus program. The currency has weakened 2.5 percent since.
The Russian currency weakened 0.2 percent against the euro to 43.8515 and slid 0.1 percent to 32.4000 versus the dollar. The ruble is the fourth worst performing emerging-market currency in the last five sessions among 24 tracked by Bloomberg.
“This week we expect a rollercoaster for the ruble, a very turbulent week,” Miklashevsky said. “Uncertainty” in the U.S. “affects emerging currencies, including the ruble,” he said.
The ruble has breached the boundary between two intervention zones in its trading band against the basket, according to Dmitry Polevoy, chief economist for Russia and CIS at ING Groep. The central bank has increased its daily purchases of foreign currency to $200 million per day, he said by e-mail.
The central bank, which reports its currency market operations with a lag, bought the equivalent of 4.35 billion rubles ($134 million) on September 26, the regulator said on its website. That brought the total amount spent since May 29 to more than 559 billion rubles.
The currency sales only have a “psychological impact on investors,” Polevoy said. “The external background is still a dominating factor.”