Ruble Weakens as Baank Rossii Says Won’t Sell in Evening

The ruble weakened against the dollar-euro basket on speculation yesterday’s steepest rally in four months was overdone. The central bank said it won’t buy or sell foreign currency during a new evening trading session.

The ruble depreciated 0.2 percent against the basket to 34.5428 by 11:50 p.m. in Moscow, retracing a 1.1 percent climb yesterday. Bank Rossii manages the ruble against the basket, which is made up of about 55 percent dollars and 45 percent euros, to contain price swings that hurt exporter competitiveness. The ruble lost 0.5 percent to 30.36 per dollar and less than 0.1 percent to 39.66 per euro.

The currency of the world’s biggest energy exporter surged on the first Russian trading day of 2013 as it caught up with a rally in commodities spurred by U.S. lawmakers agreeing to a deal to avert automatic spending cuts and tax increases. Oil closed little changed at $93.10 in New York.

“Some might be taking profits,” Vladimir Osakovskiy, Bank of America Merrill Lynch’s chief economist in Moscow said by e-mail today.

While the ruble’s trading hours were extended to 11:50 p.m. yesterday, policy makers won’t buy and sell foreign currency to influence its movements beyond 7 p.m., according to an e-mailed statement from Bank Rossii. The central bank didn’t intervene in the local market in December as it shifts to targeting inflation instead of the ruble exchange rate, the regulator said in a separate statement.

“It’s another sign that they are serious about inflation targeting,” Osakovskiy said. “Over the past several months the central bank has never tried to hold any specific levels in the ruble. Without any explicit or implicit targets for the ruble its continuous presence on the market is not really required.”

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose two basis points to 151 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index. An index of five-year government bond yields fell 21 basis points to 6.3364 percent.

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