Ruble Gains Most Among Major World Currencies as Oil Surges

  • Russian currency reverses earlier 0.5 percent decline
  • Finance Ministry sold 27.4b rubles of 30b ruble bonds offered

The ruble gained the most among major currencies and Russian shares rallied as crude soared, luring investors to increase bets on the world’s biggest energy exporter.

Russia’s currency advanced 0.9 percent against the dollar to 67.97 by 8:25 p.m. in Moscow, reversing declines of as much as 0.5 percent. Brent crude jumped 5 percent to $39.76 a barrel after U.S. stockpiles dropped from the highest level in more than eight decades. Shares in Lukoil PJSC, the country’s second-largest oil producer, rose to the highest since March 22.

Russia receives about half of its budget revenue from oil and natural gas sales. The currency has gained 11 percent since the end of February, helped by improving sentiment toward emerging-market assets following expressions of caution from the Federal Reserve on tightening monetary policy.

“The ruble is finally beginning to catch up with the oil price jump,” said Alexei Egorov, an analyst at Moscow-based Promsvyazbank PJSC, adding that the currency could strengthen to 67 if oil rises above $40 a barrel. “The ruble’s gains have legs."

Lagging Oil

The Russian currency has lagged Brent’s recovery, gaining 16.5 percent against the dollar since Jan. 20 when Brent hit a 2003 low, compared with a jump of almost 43 percent for oil for the same period.

The yield on five-year government bonds rose one basis point to 9.31 percent. The Finance Ministry on Wednesday sold 17.4 billion rubles of September 2031 fixed-rate local currency bonds out of 20 billion rubles offered and also sold 10 billion rubles of January 2025 floating-rate notes.

The Micex Index gained 0.2 percent to 1,860.17, while the dollar-denominated RTS gauge added 1.9 percent to 862.60.

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