Ruble Bond Two-Month Recovery a Blip as Rally Seen Fading

A rebound in Russian bonds that gave investors the best returns in emerging markets since April will fizzle as risks of renewed turmoil in Ukraine linger and the central bank keeps interest rates high.

Ruble debt returned 11 percent in dollar terms during the last two months, two percentage points more than second place Dominican Republic, the Bloomberg Emerging Market Local Sovereign Index shows. While that reduced the first-half loss for Russian bonds to 2.5 percent, it was still the worst among developing nations, the data show.