Ruble Climbs Third Day as Goldman Sachs Sees Support From Crude

The ruble climbed for a third day as Goldman Sachs Group Inc. forecast crude oil prices will support the currency of the world’s biggest energy exporter.

The ruble climbed as much as 0.7 percent against the central bank’s dollar-euro basket before trading less than 0.1 percent stronger at 36.4846 by 6 p.m. in Moscow. Crude oil, Russia’s main export earner, gained 0.2 percent to $106.17 a barrel in London, the highest since April 3.

The ruble will strengthen 2.8 percent to 35.5 against the basket in six months, Goldman Sachs analysts led by Thomas Stolper said in a note to clients. Oil prices close to current levels and high interest rates compared with developed markets, which support the currency’s appeal as a carry trade, will provide support, they wrote. Russia kept its key rates on hold for a ninth month last week as inflation accelerated in May to the fastest pace in 21 months.

“We still expect fundamental factors to support a stronger ruble,” they wrote.

The currency pared gains after Finance Minister Anton Siluanov said Russia is weighing a weaker ruble to spur flagging growth and is considering buying foreign currency on the market before sending oil and gas revenue to its Reserve Fund. Only “market mechanisms” should be used to devalue the currency, Siluanov said in the Bloomberg interview last week.

“There’ll be a negative impact on the ruble from these purchases,” Anton Nikitin, analyst at VTB Capital, said in e-mailed comments. “The question is how strong it will be.”

‘Less Vulnerable’

The market is waiting for June 19, when U.S. Federal Reserve Chairman Ben S. Bernanke will comment after the policy-setting Federal Open Market Committee completes a two-day meeting, Nikitin said. The ruble lost 8 percent against the basket from the year’s high on Jan. 8 to its low on June 11.

“The ruble is less vulnerable to a tightening of U.S. yields than most other emerging-market currencies,” the Goldman analysts said. The ruble’s declines are “an overshoot that will correct,” they said.

The ruble’s three-month volatility versus the dollar fell to 9.7725, compared with this year’s high of 11.1950 on June 7, data compiled by Bloomberg show. The yield on OFZ ruble bonds due 2027 rose six basis points to 7.56 percent. The Bloomberg Composite Index of emerging-market dollar-denominated debt rose 0.8 percent on June 14 to 133.522, climbing for a third day.

Bank Rossii, which reports intervention data with a one-day lag, stepped up foreign exchange interventions aimed at slowing the ruble’s decline, buying about $200 million per day on June 9 to June 13, according to website statements. The central bank spent about $1.3 billion since May 29 supporting the ruble.

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