Ruble Weakens for Third Day as Oil Prices Approach 14-Month Low

The ruble retreated for a third day after oil prices traded near 14-month lows.

The currency lost less than 0.1 percent to 36.311 per dollar at 12:10 p.m. in Moscow, the weakest level on a closing basis since March 20. The yield on 10-year local-currency bonds was unchanged at 9.34 percent.

The ruble is 0.8 percent away from a record low versus the dollar, weakened by falling oil prices. Oil and gas account for half Russia’s budget revenue. Brent crude, to which the Urals blend is linked, fell 0.4 percent to $101.84 in London, 28 cents above the lowest level since June 2013 reached two days ago.

“The fundamental ruble dependency on oil prices is growing again” as they approach $100 a barrel, Vladimir Osakovskiy, chief economist for Russia and Commonwealth of Independent States at Bank of America Corp. in Moscow, said by e-mail. “Russia’s current account strongly depends on oil prices, and has risen in size and importance from last year.”

The government, which posted a budget surplus of 675 billion rubles in the seven months through July, plans to transfer 100-120 billion rubles ($2.75-3.3 billion) into one of its sovereign wealth funds at the end of the year. If oil prices stay near current levels until then, “there will be nothing left to transfer,” VTB Capital analysts Maxim Korovin and Anton Nikitin said in a research note.

The ruble declined less than 0.1 percent to 48.1845 per euro today and traded 0.1 percent weaker at 41.6560 against the central bank’s target basket of dollars and euros.