Ruble Rebounds as Yellen Comments Prompt Emerging-Market Bounce

  • Sberbank, Rosneft lead Micex Index lower for seventh day
  • Russia to offer 27 billion rubles of debt at auction Wednesday

Russia’s ruble reversed losses after Federal Reserve Chair Janet Yellen urged caution on raising interest rates. The nation’s stock index fell, extending its longest stretch of losses since 2011, as oil traded below $40.

The currency strengthened 0.2 percent to 68.32 per dollar by 7:28 p.m. in Moscow, after falling as much as 1.1 percent earlier, as Yellen said it was appropriate for U.S. central bankers to "proceed cautiously" in tightening policy. The Micex Index of equities, which stopped trading before the comments, dropped for a seventh day.

By pushing back wagers for when the Fed will resume rate increases, Yellen’s comments revived interest in riskier assets such as the ruble, which has rallied 10 percent in March, beating all 23 of its main peers in the developing world. The currency had come under pressure in the past week as the price of oil, Russia’s main export earner, retreated from a 3-1/2-month high.

Earlier, shares in Moscow declined 0.2 percent, bringing their loss in the past seven days to 3.6 percent. Sberbank PJSC, the nation’s biggest lender, and Rosneft PJSC, Russia’s largest oil producer, were the main drags on the index on Tuesday.

Russian local-currency bonds also declined today, with the yield on five-year government debt climbing five basis points to 9.33 percent. The Finance Ministry will offer 26.9 billion rubles ($394 million) of bonds at an auction tomorrow, including inflation-linked securities, floating-rate debt and fixed-coupon bonds.

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