The ruble rebounded from the lowest level in almost six weeks as oil traded near $65 and investors speculated creditors will complete a proposal for Greece, boosting sentiment for risky assets.
Russia’s currency advanced 0.9 percent to 53.125 versus the dollar at 6:36 p.m. in Moscow, after sliding 2.5 percent on Monday. Bonds rose, sending the five-year yield five basis points lower to 10.93 percent and stocks advanced. Oil, Russia’s main export earner, increased 0.6 percent in London.
A 6 percent depreciation since the Bank of Russia started buying foreign exchange in mid-May helped drive up the price of oil in ruble terms to an almost three-month high of 3,475 per barrel on Monday. The purchases are part of a broader effort by Russian policy makers to damp the ruble’s world-beating rally in 2015, which analysts warn is curbing state revenue as the nation contends with a recession and fiscal shortfall.
“Current market fundamentals imply the ruble’s exchange rate in the range of 55 to 60 per dollar, which is more comfortable for the Russia’s state financials,” Konstantin Artemov, a money manager at Raiffeisen Capital in Moscow, said in e-mailed comments. The gains today were related to the dollar’s decline, he said.
The ruble capped its first monthly decline since January last month as the Finance Ministry also said it was selling the local currency. The Bank of Russia on Monday suspended auctions of one-year foreign-currency repurchase agreements.
The central bank said it bought $200 million on May 29, according to the latest available data, taking purchases since May 13 to about $2.5 billion.
Russian bonds climbed before the Finance Ministry holds an auction on Wednesday to raise 15 billion rubles ($282 million) from the sale of floating-rate bonds due in January 2020 and January 2025.
The Micex Index of equities added 1.8 percent in its second day of gains, led by a 4.3 percent increase in OAO Magnit and a 2.1 percent advance in OAO Lukoil. Just over half of the 50 members of the gauge were trading above their 50-day moving averages yesterday, according to data compiled by Bloomberg.