Why USA Plastics Machinery Suppliers Should Target Russia.

Feb. 12, 2011 - PRLog -- For plastics news and constantly updated data on the Russian Plastics and packaging  Market  visit www.plasticsrussia.com


The ruble climbed to its strongest since the end of April against the dollar as Brent crude oil traded above $100 a barrel for a third day, luring investors to the world’s largest energy exporter.

Russia’s currency gained 0.6 percent to 29.4525 per dollar by the 5 p.m. close of trading in Moscow, the strongest since April 30. It added 0.3 percent to 34.4992 versus the target dollar-euro basket used by the country’s central bank to control swings in the currency that harm exporters’ competitiveness, the strongest close since Jan. 18.

Brent, which underpins Russia’s Urals crude oil prices, gained as much as 0.6 percent to $102.36 a barrel today. Oil, along with natural gas, makes up about a quarter of Russia’s economic output. Brent has gained 8 percent this year, helping the ruble advance 1.8 percent against the basket, which has been used by Bank Rossii since 2005 to manage the currency.

“Investors are selling dollars and buying rubles,” Denis Korshilov, head of foreign exchange trading in Moscow at Citigroup Inc. said by e-mail. “With Brent higher than $100 it looks like some capital inflow is taking place.”

The ruble was little changed at 40.6675 per euro. The basket rate is calculated by multiplying the dollar-ruble rate by 0.55, the euro-ruble rate by 0.45, then adding them together.

Bank Rossii buys and sells foreign currency to keep the ruble within a so-called “floating corridor” against the basket. The corridor has spanned 33 to 37 versus the basket since the beginning of the year, First Deputy Chairman Alexei Ulyukayev told reporters in Moscow yesterday. The central bank purchased “several hundred million dollars” to moderate the ruble’s gains in January, Ulyukayev said.

‘Upside Potential’

The ruble has further “upside potential” should oil prices continue to climb, Vladimir Osakovsky, chief Russia economist for UniCredit SpA in Moscow, wrote in a research note e-mailed today. “Any further ruble appreciation would require still more expansion of the trade and current-account surpluses,” the note said.

Ruble-denominated government debt due August 2016 was little changed at 7.61 percent. The yield on sovereign dollar bonds maturing in 2020 fell for a third day, losing 8 basis points to 5.04 percent. Dollar debt due 2015 also rose, with the yield declining 11 basis points to 3.53 percent.

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