Ruble Rallies on Crude Oil as Bank of America Says Buy on Dips

  • Russian currency climbs most among peers as oil rebounds
  • Global stimulus bets help drive ruble to best week since May

The ruble rallied the most in emerging markets as oil climbed and Bank of America recommended buying the Russian currency, citing a positive outlook for crude prices.

The currency of the world’s biggest energy exporter is heading for its strongest weekly advance since May as speculation global central banks won’t rush to roll back stimulus fanned appetite for emerging-markets assets. The ruble rose 0.4 percent to 63.4750 per dollar by 2:08 p.m. in Moscow.

Russia seized on the U.S. Federal Reserve’s decision to keep rates on hold, selling Eurobonds for the second time this year as bond yields dropped. Bank of America’s Arko Sen says investors should pounce on any ruble weakness to buy the currency because oil is set to gain next year, while expectations OPEC will agree to coordinate output when it meets next week are so low that any surprises will boost the ruble.

"While the OPEC meetings have often disappointed oil bulls, this time the market is not particularly bullish and our oil strategists still expect oil prices to be higher next year,"Sen wrote in a note to clients. "We remain positive on the ruble and suggest dips to be bought."

Russian five-year bond yields have dropped three basis points this week after the Fed meeting eclipsed the Bank of Russia’s surprise announcement last week that rates would be kept on hold until at least the start of next year. The yield rose three basis points on Friday to 8.41 percent after dropping 18 basis points in the previous two days, the sharpest two-day decline since the start of July.

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