Hedge Funds Are Most Bullish in Two Years on Ruble Amid Gains

Hedge funds raised wagers that the ruble will advance to the most in two years as Russia’s currency strengthened for a fifth consecutive week amid signs crude prices are stabilizing.

Speculators increased net long positions in the ruble by 76 percent to 5,224 futures in the week ended March 3, the highest level since the week ended Feb. 26, 2013, U.S. Commodity Futures Trading Commission data published Friday show. The ruble strengthened 1.9 percent last week, taking its gains since the end of January to 15 percent, the most among more than 100 currencies tracked by Bloomberg.

The ruble has advanced as Brent crude rebounded from a six-year low to average $59 a barrel since Feb. 2. The currency remains 40 percent lower over the past 12 months, underscoring how the economy has been buffeted by oil’s decline from last year's June peak of almost $116 a barrel and sanctions imposed over Russia’s role in Ukraine.

Foreign-currency reserves of about $360 billion are sufficient to contain the crisis, while the widening current-account surplus and a more realistic budget are also supportive of Russia’s investment grade, Paul Rawkins, a senior director at Fitch Ratings, said in a telephone interview published today.

Fitch, the only major credit assessor that still rates Russia’s foreign-currency debt as investment grade, may review the nation's BBB- rating next month, he said. Standard & Poor’s cut Russia to junk on Jan. 26, while Moody’s Investors Service followed suit on Feb. 20.

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