The ruble fell heavily, nearing the level that will prompt the Russia’s central bank to intervene in order to stop it from depreciating further.
The currency dropped 0.8 percent to trade at 44.2450 against the central bank’s benchmark dollar-euro basket as of 8:10 p.m. Moscow time. This is about 0.4 percent of the threshold of 44.40 that will prompt the central bank to step in and buy rubles.
The ruble fell 0.7 percent versus the U.S. dollar to 39.4595. It also declined 1 percent versus the euro on Monday to 50.1300.
Yield on the 10-year government bonds rose four basis points, or 0.04 percentage point, to 9.36 percent.
The central bank’s officials last stepped in to stabilize the ruble in May, injecting $40 billion to counter capital flight that resulted from President Vladimir Putin’s invasion of Ukraine’s Crimea peninsula in March.
“The market is getting closer to panic,” Dmitry Polevoy, a Moscow-based chief economist at ING Groep NV, told Bloomberg News. “The ‘ghost’ of peak external debt payments in September and December is the most often-cited enemy of the ruble. The attempt to test 44.40 looks well grounded.”
Investors took out $74.6 billion worth of capital out of Russia in the first three months of 2014, up from $61 billion in the whole of 2013. Interfax expects investor flight to total $90 billion to $120 billion in 2014, citing Deputy Economy Minister Alexey Vedev.
Economists surveyed by Bloomberg expect Russia’s current-account surplus to decline to $8.8 billion in the quarter to September, compared with $17.1 billion in the second quarter. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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