Ruble Follows Emerging Markets Lower as Brexit Curbs Risky Bets

  • Russian currency pares second-strongest gain this year in EM
  • Stocks and bonds also lower as trading resumes after holidays

What Would a Brexit Mean for Russia?

Russia’s ruble sank as oil fell below $50 per barrel and the possibility Britain will pull out of the European Union damped investor appetite for riskier assets in developing nations.

The currency slid 1.2 percent to 66.07 by 5:33 p.m. in Moscow, its third day of declines and the weakest level since June 3. The benchmark Micex stock index fell and government five-year ruble bonds retreated, lifting the yield by the most since January. Russian markets were closed on Monday for a public holiday.

Investors pared the second-best rally in emerging markets this year after polls put the U.K.’s “Leave” campaign ahead as the June 23 referendum approaches. Nineteen of 24 developing-nation currencies tracked by Bloomberg declined, while oil, Russia’s main export earner, headed for a fourth day of losses in London.

“Brexit and oil below $50 are an excuse to take profits on a decent rally," said Yury Tulinov, head of research at Societe Generale SA’s Russian unit Rosbank PJSC. “The ruble is being impacted by global factors. International markets have been shaken by the risks of Brexit.”

The Micex retreated 1.2 percent to 1,880.13, led by declines in Sberbank PJSC, Russia’s biggest bank, and Rosneft OJSC, the nation’s largest oil producer. The yield on five-year ruble bonds increased 14 basis points to 9.08 percent, the highest in a week.

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