Ruble Falls 2nd Day as Crude Offsets Better-Than-Expected Data

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  • Real wages, retail sales shrank less than forecast in January
  • Oil falls as U.S. stockpiles rise to highest since 1930

Russia’s ruble sank the most in emerging markets and bonds fell as tumbling crude prices offset better-than-expected economic data in the world’s biggest energy exporter.

The ruble weakened 1.3 percent to 77.53 per dollar as of 8:03 p.m. in Moscow, taking its two-day drop to 3.2 percent, the most since Feb. 2. Five-year government bonds declined, lifting yields two basis points to 10.12 percent. The price of Brent crude, used to price Russia’s main export blend, fell 4.2 percent to $32.83 a barrel after U.S. crude stockpiles rose to the highest level in more than eight decades.

January economic data released on Thursday “surprised positively,” according to Goldman Sachs Group Inc. as retail sales and real wages shrank less than forecast, while the unemployment rate held steady. Russia’s economy is set to contract for a second year, the longest recession in two decades triggered by falling oil and sanctions over Ukraine. A 12 percent decline in oil this year has threatened to re-ignite inflation and prevented the central bank from resuming interest-rate cuts.

"The data is decent,” said Oleg Kouzmin, an economist at Renaissance Capital, who previously worked at the central bank. “But while oil price fluctuations are this strong, especially in percentage terms, we have no other way but to follow them.”

The currency has been buffeted by swings in the price of crude this week amid speculation Russia and Saudi Arabia will work together to put a floor under prices. Russia’s three-month implied volatility, a measure of exchange-rate swings used to price options, is the highest in emerging markets after Argentina’s peso, data compiled by Bloomberg show.

The Micex Index of stocks fell for the first time in six days, retreating 0.8 percent to 1,793.37. Feb. 20 is a working day in Russia before two days of public holidays at the start of next week.