Ruble Falls to Three-Month Low Versus Basket as Crude Retreats

The ruble weakened against Bank Rossii’s dollar-euro basket to the lowest level in three months as oil declined and the tax period ended, removing support from exporters buying the currency to make local payments.

The ruble slid 0.3 percent against the basket to 35.1053 by 7 p.m. in Moscow, the weakest since Dec. 25. The Russian currency lost 0.2 percent against the dollar to 31.1150, the lowest level since Nov. 28.

“The ruble is declining now that exporters are no longer in the market,” OAO Rosbank analysts led by Vladimir Kolychev wrote in a note to clients today.

Oil fell 1.3 percent to $96.06 per barrel in New York. Oil and gas revenue comprise about 50 percent of Russia’s budget income. Without tax payments to support the currency, the ruble may weaken to 35.30 rubles against the basket, the Rosbank analysts said. The next tax period starts on April 15.

The implied six-month NDF rate dropped one basis point to 6.29 percent, the lowest since March 5. The yield on OFZs due June 2015 rose five basis points to 5.99 percent after touching a record-low 5.94 percent on March 29.

The refinancing rate will remain at 8.25 percent when policy makers meet in Moscow tomorrow, according to 16 of 20 economists in a Bloomberg survey.

“The bet on declining yields in short-term notes may be premature,” ING Groep analyst Dmitry Polevoy, who also forecast no change in rates, wrote in a note to clients today.

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