Category: Russia

The ruble halted its four-day rally, curbing the best weekly advance in six, as investors turned their attention to the price of oil. Russia’s currency weakened as much as 0.7 percent today before trading 0.3 percent lower at 64.7990 against the dollar by 7:09 p.m. in Moscow, after gaining 3.3 percent during the rest of the week. The price of Urals in rubles is trading below the 2016 budget assumption of 3,165, meaning that the currency is “expensive,” according to Morgan Stanley analysts in a note to clients this week. Aligning political interests in Syria with those of France and the U.S. boosted investor appetite for Russian assets this week, making the ruble the second-best performer in expanded major currencies after Brazil’s real. Yet with oil near a six-year low, analysts say the ruble’s correlation to the price of the nation’s key export will soon reassert its dominance. The […]

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The ruble strengthened and bonds gained, sending yields to a one-year low, on speculation improving relations with the U.S. and Europe will lead to the easing of sanctions, outweighing concern about falling oil prices. The currency added 0.2 percent to 64.651 per dollar by 8:20 p.m. in Moscow, after weakening as much as 0.6 percent earlier. The yield on five-year notes fell 21 basis points to 9.76 percent, the lowest since October 2014. Sberbank PJSC, Russia’s biggest lender, climbed as much as 4.4 percent and closed at a two-year high. Geopolitical developments are allowing the interests of Russia to align with those of France and the U.S. in Syria, fostering greater cooperation between the former Cold War foes and boosting investor sentiment. The government has sent a resolution on forming an anti-terrorist coalition to the United Nations and expects France to support it, Russia’s Foreign Ministry spokeswoman Maria Zakharova […]

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Russian wages and retail sales declined by the most since 1999, a sign consumer demand will remain a weak link in the economy’s efforts to break out of its first recession in six years. Real wages fell 10.9 percent in October from a year earlier, a deeper contraction than the median estimate by economists for a 9.7 percent decrease, the Federal Statistics Service in Moscow said Thursday in a statement. The office revised down September’s wages contraction to 10.4 percent. Sales declined 11.7 percent from a year earlier after shrinking 10.4 percent the previous month. That compared with forecast of a 10 percent drop. Russian consumption, battered by persistent inflation and a weaker ruble, is lagging improvements in industry that propped up the economy last quarter. The loss of purchasing power is deepening the prospect that the recession will extend into next year as a glutted oil market leaves […]

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Russia plans to squeeze all the oil it can from Soviet-era discoveries to hold crude output stable for the next two decades as new finds are delayed by sanctions and slumping prices, according to the Energy Ministry. “We’ve got a safety cushion until 2035,” Deputy Energy Minister Kirill Molodtsov said in an interview in Moscow. “The potential for output growth at oil fields already in operation is higher than in unexplored territories.” Russia, which relies on oil and gas for almost half of its budget revenue, has repeatedly broken post-Soviet production records this year as drillers benefit from a weakening ruble. Nevertheless future barrels may be at risk as exploration campaigns, mostly in undeveloped areas offshore, have tailed off following investment cuts. Exploration drilling dropped 21 percent in the nine months through September after increasing in 2012 to 2014, government data show. State-run energy giants Rosneft OJSC and Gazprom […]

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Russian stocks headed for an eight-month high and the nation’s bonds advanced as President Vladimir Putin’s alliance with the U.S. in the fight against terrorism sparked speculation sanctions will be reconsidered. Natural-gas exporter OAO Gazprom and Sberbank PJSC led gains in all but two of the Micex Index’s 50 stocks, while a rally in the nation’s five-year bonds sent yields falling the most in a week. The Group of 20 meetings in Antalya, Turkey, ended with an agreement to join forces to fight radical Islamist terrorism following attacks in Paris last week that killed at least 129 people. Putin also offered to change terms on a debt owed to Russia by Ukraine, marking a U-turn in his strategy toward his neighbor following a 20-month standoff that led the U.S. and European Union to impose sanctions on many Russian companies. For investors, a move toward greater cooperation between Russia and […]

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