Russian Ruble Falls Versus Dollar, Currency Basket as Oil Slips

By Emma O'Brien

Sept. 29 (Bloomberg) -- The ruble weakened against the dollar and the Russian central bank's currency basket after the price of crude oil, the country's biggest export earner, declined for a second day.

The managed currency was at 30.2727 versus the basket as of 10:30 a.m. in Moscow, from 30.2393 on Sept. 26. The ruble dropped to 25.2243 per dollar, from 25.0408 at the end of last week. It rose to 36.4396 per euro, from 36.5929.

Bank Rossii keeps the ruble within a trading band against the basket to limit the impact of its fluctuations on the competitiveness of Russian exports. The basket rate is calculated by multiplying the ruble's rate to the dollar by 0.55, the euro rate by 0.45, then adding the two together.

Crude declined 1.6 percent to $105.21 a barrel in New York trading, extending a 1.1 percent drop at the end of last week.

The currency may recover some of its losses today after an agreement by U.S. lawmakers on a $700 billion rescue plan for the financial markets, said Ulrich Leuchtmann, head of emerging- markets currency strategy in Frankfurt for Commerzbank AG, Germany's second-biggest lender.

``The agreement is positive news for emerging-market currencies,'' he said. ``I don't expect a huge rally as the market still is concerned about the consequences for the real economy.''

The U.S. proposal, which involves the Treasury being authorized to buy distressed securities from lenders, is expected to be voted on by members of the House of Representatives and the Senate early this week.

To contact the reporter on this story: Emma O'Brien in Moscow at eobrien6@bloomberg.net