Russian Ruble Caps Longest Streak of Quarterly Gains Since 2008

  • Fourth quarter has often been negative for Russian currency
  • OPEC deal not ‘big enough’ to bolster ruble: Union Bancaire

Russia’s ruble extended its longest streak of winning quarters since the financial crisis, boosted by a second month of gains in oil following OPEC’s agreement to cut production.

The currency of the world’s biggest energy exporter added as much as 0.4 percent to 62.807 per dollar by 7:09 p.m. in Moscow, bringing the three-month appreciation to 1.9 percent, and the longest series of advances since 2008. Brent crude retreated 0.5 percent to $49 a barrel after adding 7.1 percent over the two previous days.

OPEC’s surprise pact to curb output and the U.S. Federal Reserve’s decision to put off increasing borrowing costs allowed the ruble to post its first third-quarter gain since 2013. The rally is forecast to peter out in the final three months of the year when the Russian currency traditionally faces headwinds.

“Even though the OPEC decision is really positive, there’s doubts that it’ll make oil, and hence the ruble, surge,” said Artem Roschin, a currency trader at Aljba Alliance LLC in Moscow. “The initial euphoria is gone, now investors are weighing the implications of the deal."

The ruble is forecast to weaken as much as 3.3 percent in the fourth quarter, according to analysts surveyed by Bloomberg.

Oil’s two-day surge following the announcement of the output accord by OPEC on Wednesday masks the challenge of implementing the cuts, according to Goldman Sachs Group Inc. and Morgan Stanley.

“People already were long the ruble and the OPEC news was not a big enough deal to get them to add,” said Koon Chow, a London-based strategist at Union Bancaire Privee. “Hence, as global risk appetite eased today, the ruble was dragged down."

Russian bonds fell, pushing the yield on 10-year debt up one basis point to 8.17 percent. The rate on 10-year debt declined 15 basis points during the quarter. The Micex Index of shares declined 0.9 percent, paring a gain of 4.6 percent for the period.

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