By Denis Maternovsky

The ruble weakened, posting its first weekly drop versus the dollar in a month, as oil fell below $69 a barrel on concern the global economic recovery won’t last.

Oil, the nation’s biggest export, fell after a report showed jobless rate in the U.S. climbed to a 26-year high in September, stoking concern the global economic recovery is faltering. The economy of Russia, the world’s largest energy supplier, contracted a record 10.9 percent in the second quarter as investment shrank and the global slowdown cut fuel demand.

Investors increased bets that the ruble will weaken, with non-deliverable forwards showing the currency at 30.89 per dollar in three months, from an NDF of 30.78 yesterday. The contracts are a guide to expectations about currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.

The ruble depreciated 0.2 percent to 43.9059 per euro, its first daily fall since Sept. 22. The movements against the dollar and the euro left the ruble at 36.3915 against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.

The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged Jan. 22 to defend.

Rate Cuts

The ruble fell earlier this week after Russia cut rates for the seventh time since April to stimulate the economy. Bank Rossii cut its refinancing rate by half a percentage point to 10 percent on Sept. 29. Chairman Sergey Ignatiev reiterated Sept. 30 the bank’s policy to gradually move to inflation targeting, while adding the regulator will still be conducting interventions to limit the ruble’s volatility.

“If one accepts that the central bank does want to pay more attention to inflation than in the past, one must also accept and not be surprised by seeing more volatile ruble movements,” said Ivan Tchakarov, a London-based economist at Nomura Holdings Inc.

The central bank bought between $2 billion and $3 billion this week to arrest the ruble’s appreciation, according to Goldman Sachs Group Inc. Before this week, the regulator intervened once in foreign-currency markets since late May, Goldman economists Rory MacFarquhar and Anna Zadornova wrote in a research note Oct. 1. 

URL: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aljUIU5iOZ.U