Crisis tests faith in oil-rouble link

The consensus that Russia’s rouble moves in lock-step with oil has begun to fray with some investors betting the economy’s underlying weakness could burst the official trading band even with commodity prices rising.

Russia set the band at 26-41 against a euro/dollar basket in late January, after months of controlled rouble devaluation that cost some $200 billion, or a third of its reserves, to adjust to weaker oil prices and the global economic downturn.

But the rouble remains one of the worst performing currencies in an emerging sector that has rallied since March. It has lost 8 percent against the basket this year despite a doubling in crude prices over the same period.
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