Report: Ruble's first monthly gain since April opens way for rate cut

MOSCOW, Oct 30 (PRIME) -- The ruble rose, putting it on course for the first monthly advance since April, and paving the way for the resumption of the central bank’s interest-rate cuts as soon as Friday, Bloomberg reported

Russia’s currency strengthened as much as 0.5% to 64.32 per dollar by 10:47 a.m. in Moscow, bringing its increase in October to 1.5%. Of 39 analysts surveyed by Bloomberg, 20 are projecting the central bank will reduce the benchmark by 50 basis points to 10.5%, while the rest see no change.

The stabilization in the price of oil and improved prospects for peace in Ukraine are driving gains in the ruble, which in turn eases pressure on consumer prices and enables policy makers to restart a rate-cutting cycle, said Ivan Tchakarov, a Moscow-based economist at Citigroup Inc. The central bank paused monetary easing in September as weakness in the ruble threatened to stoke inflation that’s almost four times above its target. Oil, Russia’s main export, has traded around an average $49 per barrel in the past 30 days.

“One can still make a reasonably strong case for a resumption of rate cuts," Tchakarov said by e-mail.

Russian bonds fell for the third time this week on Friday, pushing the yield up one basis point to 10.09%. They’ve returned 9.3% this month, the most after Indonesia in the Bloomberg Emerging Market Local Sovereign Index.

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