Azernews.Az

By Bloomberg

The ruble rallied for a second day, extending its biggest monthly increase on record, while Russian stocks and bonds gained as oil climbed and a cease-fire in Ukraine showed signs of holding.

The currency rose 1.4 percent to 60.5470 per dollar by 12:08 p.m. in Moscow, taking its advance in February to 15 percent. Crude oil, Russia’s main export earner, is trading near its highest level this year, while Ukraine signaled that the cease-fire struck this month may endure.

“Oil rallies and so does the ruble,” Dmitry Polevoy, chief economist for Russia and CIS at ING Groep NV in Moscow, said in e-mailed comments. “The geopolitical concerns have mostly been priced in, and to move the ruble considerably weaker, any new economic sanctions must be much tougher than what they are right now in reality, not on paper.”

The resurgence in Brent crude, which reached a high for the year of $63 per barrel last week, helped make the ruble February’s best-performing major currency after it posted the sharpest losses last year. There were no cease-fire breaches in eastern Ukraine after 12:45 a.m. local time, according to the country’s military. The deal is producing tangible results, Russian Foreign Minister Sergei Lavrov said in Moscow.

Brent, used to price Russia’s main export blend, rose 0.5 percent to $61.96, extending yesterday’s 5.1 percent surge. Oil, which along with the natural gas brings half of the Russia’s state budget revenue, has bounced back 8 percent since the beginning of the year after almost halving in 2014.

‘Chronically Tangled’

“Oil is the key factor,” Vladimir Evstifeev, an analyst at Bank Zenit, said in e-mailed comments. “The geopolitics are chronically tangled, but there are no sharply negative signals.”

The dollar-denominated RTS Index of equities gained 3.2 percent to 911.81, ending two days of declines. The RTS has rallied 24 percent in February, the most globally after Greece’s benchmark gauge among 93 indexes monitored by Bloomberg.

Government five-year bonds rose for the first time in three days, reducing the yield 21 basis points to 13.66 percent. The government sold all the five-year debt it offered at an auction on Wednesday.