Ruble Heads for Biggest Weekly Drop Versus Basket Since Sept. 5

By Alex Nicholson

Nov. 14 (Bloomberg) -- The ruble headed for its biggest weekly decline in more than two months after Russia's central bank let the currency weaken amid an exodus of foreign capital.

The ruble was little changed at 30.6815 against a basket of dollars and euros as of 10:29 a.m. in Moscow. It fell 0.2 percent to 27.3510 per dollar and rose 0.1 percent to 34.8081 per euro.

The ruble is down 1.2 percent this week versus the basket, the most since the five days through Sept. 5, after Urals crude, the country's main export blend, dropped for the sixth week in seven. The currency may be allowed to weaken further should the global economic crisis deepen, Arkady Dvorkovich, an adviser to President Dmitry Medvedev, said yesterday.

Urals crude dropped almost 5 percent this week to its lowest level this year as demand for fuel waned amid the global slowdown. Investors have withdrawn about $158 billion from Russia since the start of August, according to BNP Paribas SA.

Bank Rossii, the central bank, manages the ruble's exchange rate within a trading band against a currency basket comprised of about 55 percent dollars and 45 percent euros. The bank widened the trading band by 30 kopeks on each side Nov. 11.

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net.