Russia’s Ruble Declines as Ukraine Ceasefire Deadline Approaches

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Russia’s Ruble Declines as Ukraine Ceasefire Deadline ApproachesThe Russian ruble plummeted by the steepest margin since April while bonds declined just before a deadline for ceasefire in Ukraine ended on Monday night.

The ruble plunged 0.7 percent versus the U.S. dollar to close at 33.9785 in Moscow, lowering its advance to 5.6 percent since February 28, just before Russia invaded Ukraine. Government bond yields for bonds that mature in February 2027 surged two basis points to close at 8.50 percent. The Micex Index of 50 Russian stocks plunged just under 0.1 percent to 1,476.38, paring its gain to 2.2 percent since February 28.

Russian President Vladimir Putin was reportedly searching for a solution to Ukraine crisis with Ukrainian peer Petro Poroshenko, along with French and German leaders.

The Brazilian real ended a four-day winning streak after the government’s budget deficit widened expanded the most since 2008 economic recession, making it unappealing to foreign investors. The real fell 0.4 percent to trade at 2.2031 per U.S. dollar as of 12:40 p.m. local time, paring its gain this quarter to 3.1 percent.

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The central bank announced that budget shortfall for public bodies, such as state-owned firms, expanded last month to 32.4 billion reais, up from 4.6 billion reais a month earlier. The min surplus adjusted for interest payments stood at 1.52 percent of the GDP, much lower than this year’s target of 1.9 percent.

“It’s another frustrating figure regarding the Brazilian economy,” Jessica Strasburg, a Sao Paulo-based economist at CM Capital Markets told Bloomberg. “Everything indicates the government will not be able to meet its primary budget target of 1.9 percent of GDP by the end of the year.”

The swap rates on the contracts that mature in January 2017 plunged 0.01 percentage point or one basis point to 11.49 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com