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By Bloomberg

The ruble sank for a fourth day after the central bank’s surprise interest-rate cut on Friday eroded support for the Russian currency as companies face $10.2 billion of foreign-currency debt payments this month.

The maturing loans and bonds may exert pressure on the ruble, which was the biggest loser in emerging markets in January as fresh sanctions over Ukraine loom. The 200 basis- point interest rate cut stoked concern central bank Governor Elvira Nabiullina is bowing to government pressure to foster growth by reducing borrowing costs. The ruble pared declines after Brent oil surged as much as 5 percent today.

“The sudden rate cut and lack of clarity behind the central bank’s policy continue to weigh on the ruble,” Andrey Vashevnik, who manages $25 million as the chief investment officer at R&B Investment Fund Ltd. in Moscow, said by phone. “Large foreign-debt repayments will pressure the currency. I expect the ruble to fall lower as there are no fundamental support factors.”

The ruble lost as much as 2.3 percent against the dollar, before trading down 0.5 percent at 69.2250 at 3:43 p.m. in Moscow. Government bonds gained for a second day, pushing the five-year yield down 28 basis points to 14.59 percent, the lowest since Dec. 15, as the rate cut made the return on local bonds more appealing to investors.

Nabiullina is trying to keep lending flowing in an economy on the brink of contraction, while avoiding a deeper currency slump that’s already punishing local companies, with a wine importer filing for bankruptcy. A manufacturing indicator fell to the lowest since June 2009 last month, according to a purchasing managers’ index released by HSBC and Markit Economics.

Wine, Jeans

Traders have pared bets on the central bank’s rate cuts over the next three months to about 1 percentage point from as much as 8.7 percentage points on Dec. 22, according to data compiled by Bloomberg.

Russia’s second-largest French wine importer, the Rusimport trading house, filed for bankruptcy after the ruble’s 46 percent decline last year sent the cost of imports soaring, according to court documents and a report by the Kommersant newspaper.

The currency’s weakness also scuppered a plan by Russian clothes retailer Gloria Jeans to sell a 25 percent stake for $250 million to investors including Goldman Sachs Group Inc, according to the Vedomosti newspaper.

After tumbling as much as 4.3 percent following the rate cut on Friday, the ruble pared its loss to 0.3 percent as crude oil, Russia’s main export earner, surged 7.9 percent. Brent climbed 1.6 percent today on speculation a strike among U.S. refiners is lifting prices for refined fuels.

Short-Term

“Brent has risen to $55 and is boosting the ruble,” Sergey Fishgoyt, the deputy head of foreign-exchange trading at Otkritie Bank in Moscow, said by e-mail. “This move is most likely short-term although we might see Brent rise to $60 or $65 this year.”

Fighting between Ukraine government forces and pro-Russian rebels in the regions of Donetsk and Luhansk in eastern Ukraine has intensified, deepening the worst standoff between Russia and the U.S. since the Cold War. Ukrainian President Petro Poroshenko called on Sunday for a truce in the separatist conflict.

The Micex Index rose 0.2 percent to 1,650.73, led by oil producers OAO Tatneft and OAO Bashneft. The dollar-denominated RTS index gained 1.8 percent, snapping three days of declines.