Ruble’s Record Month Gains Momentum From Ukraine Truce Optimism

The skyscrapers of the Moscow International Business Center on Oct. 28, 2014.

Photographer: Andrey Rudakov/Bloomberg

The ruble strengthened for a second day, extending its biggest monthly gain on record, as signals that the latest attempt at peace in eastern Ukraine is holding sent Russian stocks rallying the most globally.

The currency advanced as much as 3 percent to dip below 60 per dollar for the first time in seven weeks as the Ukrainian military said there were no cease-fire breaches since 12:45 a.m. local time. The ruble is on course for a 13 percent appreciation in February, bolstered by the biggest monthly jump in Brent crude in six years.

“Oil rallies and so does the ruble,” Dmitry Polevoy, the chief economist for Russia and CIS at ING Groep NV in Moscow, said in e-mailed comments. “The geopolitical concerns have mostly been priced in, and to move the ruble considerably weaker, any new economic sanctions must be much tougher than what they are right now.”

The rebound in crude, Russia’s biggest export earner, is boosting appetite for assets in the world’s largest energy exporter after the nation’s annexation of Crimea almost a year ago triggered sanctions that drove investors out. The truce that came into effect 12 days ago is producing tangible results, Russian Foreign Minister Sergei Lavrov said in Moscow.

The ruble traded 0.9 percent stronger at 60.865 per dollar by 7:13 p.m. in Moscow, having reaching 59.6010 earlier. Brent lost 0.9 percent to $61.07 a barrel, trimming its monthly advance to 15 percent. The dollar-denominated RTS Index of stocks climbed 3.2 percent on Thursday.

Stocks Advance

“Oil is the key factor,” Vladimir Evstifeev, an analyst at Bank Zenit, said in e-mailed comments. “The geopolitics are chronically tangled, but there are no sharply negative signals.”

The RTS Index has rallied 24 percent in February, the most globally after Greece’s benchmark gauge among 93 indexes monitored by Bloomberg. OAO Sberbank climbed 2.4 percent to lead advancers in Moscow today. Following this month’s rally, 46 of the benchmark Micex Index’s 50 members are trading above their 50-day moving average, according to data compiled by Bloomberg.

Five-year government bonds increased for the first time in three days, reducing the yield three basis points to 13.84 percent. The government sold all the five-year debt it offered at an auction on Wednesday.

Local-currency debt has returned 19 percent in February, the most among 32 countries in the Bloomberg Emerging Market Local Sovereign Index. Losses in the past year for Russian debt are the worst in the group.

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