Ruble and Stocks Rise on IMF Plans and Greek Debt Deal

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Russian stock markets and the ruble moved higher on Thursday after news that the International Monetary Fund planned to boost funds to help fight Europe’s sovereign debt crisis and the Greek government moved closer to a deal with private bondholders.

 

Russian stock markets and the ruble moved higher on Thursday after news that the International Monetary Fund planned to boost funds to help fight Europe’s sovereign debt crisis and the Greek government moved closer to a deal with private bondholders.

Russia’s ruble-denominated MICEX stock index rose 0.23 percent to 1,497.09 while the dollar-denominated RTS was up 0.31 percent to 1,492.99 as of 11:47 p.m. Moscow time (07:47 GMT).

The ruble gained 5 kopecks against the U.S. dollar to 31.48 but fell 12 kopecks against the euro to 40.48, following trends on European trading floors where the single European currency strengthened 0.15 percent against the greenback to 28.44 as of the same time.

IMF Managing Director Christine Lagarde said on Wednesday the IMF wanted an agreement to be struck at a G20 meeting of finance ministers and central bankers in Mexico City on February 25-26 to boost’s the lender’s funds from the current $385 billion to $1 trillion.

“The biggest challenge is to respond to the crisis in an adequate manner and many executive directors stressed the necessity and urgency of collective efforts to contain the debt crisis in the euro area and protect economies around the world,” Lagarde said:

The IMF’s announcement improved investor sentiment, with European markets largely growing in early Thursday trade.

Britain’s FTSE 100 index rose 0.15 percent to 5,702.37 points, Germany’s DAX was up 0.34 percent to 6,354.37 while France’s CAC 40 went down 0.15 percent to 3,264.93 as of 07:51 GMT.

Also on Wednesday, The Financial Times reported that the Greek government had appeared to move closer to a deal with private bondholders that could avert a threatened default by Athens.

Talks with the holders of some 206 billion euros ($260 billion) in Greek sovereign debt broke down last week as some eurozone officials insisted on a sharply lower coupon on new bonds.

The latest proposal envisages a coupon starting at 3 percent and rising to 4.5 percent as the bond approaches maturity, with the average interest paid during the term of the bond at 4.25 percent.

The deal would amount to a 68 percent loss for bondholders compared with the initially proposed 50 percent “haircut,” allowing Greece to write off 140 billion euros out of its massive 360 billion euro debt.

 

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