Azernews.Az

By Bloomberg

The ruble gained for a second day, tracking oil’s advance back above $50 per barrel, as the correlation between the Russian currency and the nation’s main export stayed near two-year highs.

The ruble has been moving more in tandem with the price of Brent crude through the course of 2015, with the relative price moves between the two assets reaching the closest since July 2013 last week. In addition to exerting downward pressure on Russian oil and gas revenues, the declining price of oil is weighing on an economy facing its deepest slowdown since 2009 due to sanctions over the conflict in Ukraine.

“Russia’s definitely going to remain a petrocurrency for the next five to 10 years as the share of oil and gas flows dominates export flows,” Dmitry Dorofeev, a managing partner at the multi-asset White Dragon Global Macro Fund in Moscow, which currently doesn’t invest in ruble-denominated assets, said in e- mailed comments.

The ruble advanced 0.2 percent to 62.948 per dollar by 12:21 p.m. in Moscow. It fell to a six-month low on Monday as Brent crude tumbled below $50 a barrel for the first time since January. Oil traded 0.4 percent stronger at $50.20 a barrel in London today.

Government bonds, which gained last month as the central bank lowered benchmark borrowing costs for the fifth time this year, fell on Wednesday, sending yields up two basis points to 11 percent. The Finance Ministry will offer 15 billion rubles ($238 million) of floating-rate bonds at auctions today.

Shares in Moscow rose for a second day as PAO Moscow Exchange added 1.9 percent. The bourse reported a 66 percent jump in earnings before interest, taxes, depreciation and amortization in the second quarter.

Projections for future price swings in the ruble, the most- volatile emerging-market currency, were little changed at 22 percent, a seven-week high.