Ruble Snaps Three Days of Losses as Minister Talks Up Stability

The ruble snapped three days of declines against the central bank’s target basket after officials including Russia’s finance minister said the currency was stable.

The ruble strengthened 0.1 percent to 38.0854 against Bank Rossii’s dollar-euro basket, erasing a loss of 0.2 percent, by 6 p.m. in Moscow, when the central bank stops its market operations. The Russian currency was little changed at 33.1090 versus the dollar and gained 0.2 percent to the euro to 44.1965.

There’s no “significant” depreciation of the Russian currency, which is “relatively stable,” Finance Minister Anton Siluanov told reporters today in Rostov-on-Don. The currency is “firm enough and stable,” Sergei Shvetsov, a Bank Rossii first deputy chairman, said in Moscow, citing the ruble’s performance against a basket of 18 currencies.

Bank Rossii spent the equivalent of 379 billion rubles ($11 billion) propping up the currency since May 29, a week after U.S. Federal Reserve Chairman Ben S. Bernanke’s comments on scaling back stimulus sparked a rout in emerging-market assets. Russian policy makers are shifting to an inflation-targeting regime away from focusing on the exchange rate and are seeking a free-floating currency by 2015.

The Russian central bank manages the currency as it trades in a floating, seven ruble-wide corridor against the dollar-euro basket. It has raised the corridor as its interventions accumulate, lifting the band to 32.05-39.05 rubles versus the basket from 31.65-38.65 in the past two months.

Free Float

“The ruble is not weakening,” Shvetsov said. “It’s fluctuating as we move toward a free float.”

The ruble is the 16th best-performing currency against the dollar in the past 12 months with a 3.7 percent decline among 31 expanded major currencies, data compiled by Bloomberg show.

“There are currencies that have weakened against the dollar in the last year, and there are those that have strengthened,” Shvetsov said. “The ruble is somewhere in the middle.”

The Finance Ministry plans to spend 30 billion to 50 billion rubles purchasing currency on the open market for its national wealth funds before the end of the year, Siluanov said.

Previous estimates of the ministry’s purchases were about $50 million per day, while Siluanov’s comments imply no more than $15 million to $20 million per day, according to Vladimir Osakovskiy, chief economist for Russia at Bank of America Corp.

“The number is much smaller than earlier estimates,” he said by e-mail. “We view the statement as marginally positive for the ruble.”

The yield on government ruble debt due February 2027 rose two basis points, or 0.02 percentage point, to 8 percent, the highest on a closing basis since June 26.

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