Ruble Climbs in Week on Bank Rossii Curbing Purchases, Oil Gains

The ruble climbed in the week against the central bank’s target dollar-euro basket as the regulator curbed foreign currency purchases and crude oil rose on signs of growth in the U.S. and China.

The ruble closed little changed at 34.8060 against the basket by 11:50 p.m. in Moscow, giving it a 0.2 percent gain in the week. The currency dropped 0.3 percent to 30.27 per dollar and was little changed at 40.35 against the euro.

The central bank curbed interventions this week after buying about 15.3 billion rubles ($506 million) of foreign currency at the start of the year to stem the ruble’s advance. Crude, Russia’s main export, headed for the longest weekly winning streak in 14 months, trading at $95.41 in New York. China’s economic growth accelerated for the first time in two years, while U.S. housing starts beat economists’ estimates, data said yesterday.

“High oil prices are supporting a strong ruble rate,” Vladimir Kolychev, Rosbank’s chief economist, said by phone today from Moscow.

Bank Rossii First Deputy Chairman Alexey Ulyukayev said on Jan. 16 that Japan’s decision to pursue a weaker yen may lead to a “currency war” that would hurt the global economy as nations seek to protect their export industries. The drop in volatility stemming from Russia’s interventions will benefit the domestic debt market, according to VTB Capital.

Yields on government ruble bonds due July 2022 fell for a second day, losing two basis points to 6.72 percent. Bets Russia’s government will open its domestic debt market to Euroclear Bank SA, the world’s biggest bond settlement system, are also boosting bonds, Kolychev said.

Entry Expected

“Specific statements on Euroclear were made,” he said. “Foreign investors expect to enter the country’s bond market.’

There are no obstacles stopping Euroclear from working in Russia and the country’s market watchdog is sending it a written response to a clarification request today, the Federal Financial Markets Service said yesterday.

The ruble may climb to 34.65 to the basket by the end of the first quarter, the level at which the central bank intervenes to weaken it, according to Kolychev.

The extra yield investors demand to own Russia’s dollar bonds over U.S. Treasuries rose four basis points to 162, according to JPMorgan Chase & Co.’s EMBI Global Index.

Before it's here, it's on the Bloomberg Terminal.