Ruble Rebounds on Central Bank Stability Steps as Sberbank Soars

By Ksenia Galouchko and Maciej Onoszko Dec 17, 2014 1:27 PM ET

The ruble rallied the most since 1998 and shares of Russia’s largest bank jumped 29 percent in London as the government sold dollars and the central bank said it will help companies meet foreign-currency debt obligations.

The currency gained 11 percent to 60.7495 a dollar by 6:13 p.m. in London, ending a seven-day, 22 percent drop. The Bank of Russia said lenders won’t have to write down the value of assets affected by the weaker ruble and falling bonds, allowing banks to use the third-quarter exchange rate in valuing risk-weighted assets. Shares of OAO Sberbank (SBER), the nation’s largest lender, rose the most on record in London and its bonds rallied.

The central bank measures, which also include the provision of foreign-exchange loans and additional repurchase auctions, come after the Finance Ministry bought rubles today to arrest the worst depreciation since 1998. Russian markets went into freefall yesterday as a surprise interest-rate increase failed to shore up investor confidence. Today’s advance trims the ruble’s slide this year to 45 percent.

“Authorities made a combined effort, giving strong signals to the market that they are doing anything it takes to stem the ruble rout and turn things around,” Bernd Berg, a London-based emerging-market strategist at Societe Generale SA, said in e-mailed comments. “As a result the ruble is gaining strongly.”

--clip
“At this stage it is too early to judge if the ruble is out of the woods,” Piotr Matys, London-based emerging-market foreign-exchange strategist at Rabobank International, said by e-mail. “Odds for a full-blown financial crisis increased markedly after the drastic monetary policy tightening announced on Monday night failed to stabilize the ruble.”

more...

http://www.bloomberg.com/news/2014-12-17/ruble-soars-with-russian-stocks-on-central-bank-stability-steps.html