Azernews.Az

By Bloomberg

The ruble extended a fifth week of declines in the longest slump since November and bonds fell as the selloff in oil drove the price of Brent to a three month-low.

Russia’s currency weakened 0.9 percent against the dollar to 58.3710 by 2:27 p.m. in Moscow, set for a 2.4 percent decline this week. The decline pared this year’s gain to 4 percent, still the best performance among 24 emerging-market currencies tracked by Bloomberg worldwide.

Oil, which along with natural gas accounts for half Russia’s revenue, has tumbled in London and entered a bear market in New York amid a persisting surplus. The ruble’s correlation with oil rose to 0.47 this week, the highest level in two years, according to data compiled by Bloomberg.

“The ruble is a petrocurrency, and oil is on another leg down,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said in e-mailed comments.

Brent crude slipped 0.2 percent in London to $55.17 a barrel, extending its decline from this year’s peak in May to 21 percent.

The Micex index of stocks fell 0.7 percent, extending this week’s loss to 2.5 percent. OAO Gazprom, the nation’s largest natural-gas company, dropped 0.7 percent.

The yield on five-year government bonds rose 12 basis points to 10.87 percent, bringing the increase over five days to 38 basis points, the biggest jump since the week ended June 5. The discount to the central bank’s key rate shrank to 63 points from 101 points a week ago. Policy makers are scheduled to meet on July 31.

“Expectations from the next central bank meeting have been pared down,” Kirill Sychev, a fixed-income analyst at Bank Zenit, said in an e-mailed note. “The markets now on average see a 50 basis-point rate cut, not 100 basis points as last week.”