Russia Bonds Drop as Ruble Rout Seen Reducing Rate-Cut Prospects
- Russian currency weakens 2nd day as oil prices tumble
- Bank of Russia warned it may raise rates on inflation risks
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Russian government bonds retreated for a third day as oil’s renewed drop weakened the ruble the most among emerging-market currencies, spurring speculation the central bank will delay a return to a rate-cutting cycle to avoid stoking inflation.
Yields on the government’s five-year securities rose 14 basis points to a week-high of 10.55 percent. The rate has risen 31 basis points since Jan. 29, when the Bank of Russia removed a reference to resuming an easing cycle, saying instead it would consider hoisting borrowing costs if inflationary pressures worsen. The ruble fell 2.2 percent to 79.05 per dollar by 4:15 p.m. in Moscow.