Azernews.Az

By Bloomberg

The ruble weakened the most among emerging- market currencies outside Asia and Russian bonds fell on concern exports will suffer from a slowdown in the Chinese economy.

Russia’s currency declined 0.6 percent to 64.686 per dollar by 2:31 p.m. in Moscow, the lowest level since Feb. 13. Five- year government bonds decreased for the first time in four days as the Finance Ministry raised cash at a weekly auction of local debt known as OFZs.

China lowered the yuan’s daily fixing by 1.6 percent following a 1.9 percent cut on Tuesday, triggering a selloff in emerging-market assets that was deepest for countries with strong trade ties to the world’s second-biggest economy. Only the ruble fell more than the yuan yesterday as speculation China’s economy is slowing weighed on the price of oil, Russia’s main export earner. Industrial production in China expanded less than analysts estimated last month.

Weakness in the Russian currency “implies near-term commodity-price pressure, which would see the ruble as an underperformer, together with Russia’s bilateral trade reliance with China,” Tom Levinson, the chief foreign currency and interest-rates strategist at Sberbank CIB in Moscow, said in e- mailed comments.

China is Russia’s second-biggest export market after Germany and the largest source of its imports. Brent crude rose 1.2 percent on Wednesday to $49.76 a barrel, still 52 percent weaker in the past 12 months. The ruble has slumped 44 percent in the same period, the worst performer among 24 emerging markets monitored by Bloomberg.

Sentiment Shift

Sentiment toward the ruble shifted for the worse after a one-day rally on Monday that was triggered by comments from the nation’s central bank that Russia can use proceeds from its current-account surplus to service external debt payments this year.

Borrowers in the country have been locked out of global debt markets by sanctions over the conflict in Ukraine for more than a year, leaving the ruble prone to losses when Eurobond payments come due.

The Finance Ministry sold 6.16 billion rubles ($95 million) of floating-rate debt due in December 2017 on Wednesday out of the total 10 billion rubles tendered. That marks an improvement over last week’s sale, when it met only 20 percent of its debt- sale target.

Yields on five-year notes increased three basis points to 11.11 percent.