Ruble Gains With Russian Bonds on ‘Mild’ Sanctions, Troop Pledge

The ruble gained for a second day on optimism a new round of sanctions will have a limited impact on the domestic economy while the defense minister pledged Russian troops won’t enter Ukraine.

The currency advanced 0.2 percent to 41.9510 against the central bank’s target basket of dollars and euros by 11:45 a.m. in Moscow, extending yesterday’s 0.6 percent gain. The yield on sovereign ruble-denominated debt due February 2027 declined eight basis points to 9.51 percent.

The U.S. sanctions list of seven Russian officials and 17 companies didn’t include OAO Gazprombank or state-owned development bank Vnesheconombank as some investors had speculated. Defense Minister Sergei Shoigu reiterated in a telephone conversation with his U.S. counterpart Chuck Hagel that Russian forces would not invade Ukraine.

“Mild economic sanctions coupled with news of Russian troops moving from the border of Ukraine may give investors a reason to buy,” Igor Golubev, head of fixed income research at OAO Promsvyazbank in Moscow, said in an e-mailed note.

The ruble has declined 8 percent versus the dollar this year, the second-worst performance among 24 developing-country currencies monitored by Bloomberg. It strengthened 0.4 percent to 35.7269 today and was 0.3 percent stronger against the euro at 49.5399.

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