Ruble Erases Gains as Volatility Jumps to 3-Month High on OPEC

Updated on
  • VanEck Vectors Russia ETF had $11.4 million inflows on Monday
  • Ruble’s 30-day historical volatility is at August high

Citigroup's Morse Sees OPEC Reaching an Output Deal

The ruble erased gains and the currency’s price swings surged to the highest in three months as investors grew more cautious over prospects that OPEC members will reach a deal to cut output.

The currency of the world’s biggest energy exporter slid 0.2 percent to 64.0425 by 7:11 p.m. in Moscow, its first drop in three days, as the price of Brent crude moved between gains and losses. The ruble’s 30-day historical volatility was at 15.082, close to the highest since the end of August.

A deal by the Organization of Petroleum Exporting Countries to bolster oil prices could be a boon for Russia’s economy and markets as the country struggles to pull out of its deepest recession in two decades. Russia’s government has added more than 400 billion rubles ($6.3 billion) to its projected budget revenue based on the OPEC talks, according to two officials familiar with the calculations.

“With OPEC, it may turn out that traders are buying on the rumor of a deal and will sell on the fact,” Igor Akinshin, a foreign-exchange trader at Alfa Bank in Moscow, said by e-mail. “The ruble’s volatility will rise.”

OPEC talks in Vienna Tuesday haven’t resolved the question of whether Iraq and Iran will participate in any production cuts and will defer the matter to the meeting of ministers on Nov. 30, according to two delegates.

The Micex stock index rose for a second day, adding 0.4 percent to 2,066.18, a new record high. VanEck Vectors Russia ETF had $11.4 million inflows on Monday, the fourth day of inflows and the longest stretch since October 2015, according to data compiled by Bloomberg.