Ruble Gains for Third Week as Central Bank Beats Speculators
By Emma O’Brien
March 13 (Bloomberg) -- Russia’s ruble jumped to a one-month high against the dollar, advancing for a third straight week, as the central bank’s defense deterred speculators and rising oil prices helped spur investment.
The ruble climbed as much as 1.1 percent to 34.6101 per dollar, gaining 3 percent in the week, the most since the five days ending Feb. 13. It added 0.9 percent against the central bank’s target basket of dollars and euros to 39.2343 by 5 p.m. in Moscow today, which is within the 41 level the central bank vowed to defend on Jan. 22.
Bank Rossii has stabilized the ruble since January by raising interest rates, curbing bank refinancing and threatening to sell more foreign-currency reserves. The ruble lost 34 percent against the dollar between August and January, as a 63 percent slump in oil and the worst economic crisis since Russia’s 1998 debt default drove Russians and foreign investors to withdraw more than $300 billion, according to BNP Paribas SA.
“The central bank is the winner on the ruble expectations battle so far,” said Evgeniy Nadorshin, a senior economist in Moscow at Trust Investment Bank. “Without a single doubt devaluation expectations are contained, no one thinks it’s going to go over 41 in the near future.”
Russia’s currency also gained against the euro, jumping 0.9 percent to 44.7357, and bringing its advance in the week to 1 percent. The basket, which is made up of about 55 percent dollars and the rest euros, has been used since 2005 to limit currency fluctuations that disadvantage local exporters. The ruble added 2 percent against the basket this week.
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