The ruble fell, extending the longest weekly slump since November, and bonds declined as the selloff in oil drove the price of Brent to a three month-low. A dollar-denominated gauge of stocks entered a bear market.
Russia’s currency weakened 1.1 percent against the dollar to 58.4980 by 6:47 p.m. in Moscow. It declined 2.6 percent this week, the most since the period ended June 7. The RTS Index extended the retreat from its peak in May to more than 20 percent.
Oil, which along with natural gas accounts for half Russia’s revenue, has tumbled in London and entered a bear market in New York amid a persisting surplus. The ruble’s correlation with oil rose to 0.47 this week, the highest level in two years, according to data compiled by Bloomberg.
“The ruble is a petrocurrency, and oil is on another leg down,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said in e-mailed comments.
Brent crude slipped 1.4 percent in London to $54.51 a barrel and is 49 percent down from a year ago.
The RTS index slid 2.9 percent and the ruble-denominated Micex Index fell 1.3 percent, extending this week’s loss to 3.3 percent. OAO Gazprom, the nation’s largest natural-gas company, dropped 1.4 percent.
The yield on five-year government bonds rose 15 basis points to 10.9 percent, bringing the increase over five days to 41 basis points, the biggest jump since the week ended June 5. The discount to the central bank’s key rate shrank to 60 basis points from 101 a week ago. Policy makers are scheduled to meet on July 31.
“Expectations from the next central bank meeting have been pared down,” Kirill Sychev, a fixed-income analyst at Bank Zenit, said in an e-mailed note. “The markets now on average see a 50 basis-point rate cut, not 100 basis points as last week.”