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The ruble held near what analysts regard as the weak end of its trading range against the dollar-euro basket on speculation that the global credit crisis is forcing Russian companies to pay off debt.
The managed currency fell against the dollar for a sixth day as U.S. lawmakers deliberated on a $700 billion rescue plan for financial markets. Prices on bonds issued by Russian companies slipped almost 4 percent last month as rising borrowing costs and a lack of liquidity prompted the government to pledge $150 billion in aid to banks and state-run companies.
"The ruble is stuck at the weak end of the band because of corporate demand for dollars to pay their debt," said Martin Blum, head of emerging-markets economics and currency strategy at UniCredit in Vienna. "Maturing debt and loans are not being rolled because of the global situation, and so companies need to get a hold of dollars."
The ruble was little changed at 30.38 versus the basket Thursday evening, compared with 30.38 on Wednesday. It has lost 0.5 percent this week. A number of banks have said the weak level of the Central Bank's trading range is 30.40.
The currency weakened to 25.99 versus the dollar, the lowest level since June 2007. It was recently at 25.92 per dollar, from 25.73 on Wednesday, and was headed for a 3.5 percent decline this week, after two rising weeks.
The ruble rose to an eight-month high of 35.72 against the euro, before trading at 35.84, from 36.05.
Corporate Debt Keeps Ruble Low
03 October 2008
Bloomberg
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