Ruble Heads for Fourth Weekly Gain Before Ukraine Elections

The ruble strengthened, set for its fourth weekly gain, as investors pared bets the crisis in Ukraine will worsen amid preparations for elections on May 25.

The ruble advanced less than 0.1 percent to 39.9593 against the cental bank’s target dollar-euro basket by 10:30 a.m. in Moscow, headed for a 1.5 percent gain in the week. The currency is trading 1.4 percent weaker than its 200-day moving average, the crossing of which may signal stronger conviction gains will be sustained.

The ruble has gained 3.9 percent versus the dollar this month, the most among 24 emerging-market currencies tracked by Bloomberg, as Russia announced the withdrawal of troops from Ukraine’s border. Ukraine’s billionaire chocolate magnate Petro Poroshenko is regarded as the front-runner to win the presidential poll as fighting continues in the south and east of the country.

“The newsflow from Ukraine remains rather negative, but the base case foresaw much higher tension ahead of the elections,” Oleg Kouzmin, an economist for Russia and the Commonwealth of Independent States at Renaissance Capital in Moscow, said in e-mailed comments.

The yield on local-currency debt due February 2027 declined 3 basis points to 8.82 percent, the lowest level since March 3. The yield is down 21 basis points in the week. The ruble traded little changed at 34.3280 versus the dollar and advanced less than 0.1 percent to 46.8450 per euro.

Russian companies, including the biggest exporters, will pay as much as 943 billion rubles ($27 billion) in taxes in the second half of May, six analysts surveyed by Bloomberg said. That may create additional demand for the currency, according to Kouzmin.

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