Ruble Climbs for a Second Day After Russia-Georgia Cease-Fire

By Yon Pulkrabek

Aug. 13 (Bloomberg) -- The ruble rose for a second day against the central bank's dollar-euro basket after Russia ordered a halt to military operations in Georgia.

The ruble climbed 0.4 percent to 29.5076 versus the basket as of 10:34 a.m. in Moscow, from 29.6148 yesterday. Against the dollar, the Russian currency also increased 0.4 percent, and its gain versus the euro was 0.3 percent.

French President Nicolas Sarkozy said Georgia agreed to a modified plan to end fighting in the breakaway region of South Ossetia after the former Soviet republic's military was routed by Russia in a five-day war. The fighting was sparked by Georgia's move to retake South Ossetia.

The central bank protects exporters by confining the ruble to a band versus the basket, which is calculated by multiplying the ruble rate to the dollar by 0.55 and the rate to the euro by 0.45, then adding the two together.

The ruble jumped yesterday by the most in 7 1/2 years against the dollar after Russian President Dmitry Medvedev stopped the military action in Georgia.

The yield on the 7.5 percent bond due March 2030 fell 4 basis points to 5.64 percent today. The yield on the 8.25 percent note maturing in March 2010 dropped 3 basis points to 5.79 percent. Bond yields move inversely to prices.

To contact the reporter on this story: Yon Pulkrabek in Prague at ypulkrabek@bloomberg.net