Russian stocks rose the most in more than three weeks and bonds gained after talks on Ukraine yielded an agreement aimed at easing the conflict. The ruble weakened after surging the most this month yesterday.
Sanctions over Ukraine may threaten Russia’s investments in assets denominated in euros and U.S. dollars, Economy Minister Alexei Ulyukayev said, urging the use of the nation’s wealth funds for domestic projects.
Russian capital outflows in the first quarter were the largest since the last three months of 2008 when the collapse of Lehman Brothers Holdings Inc. triggered the biggest credit squeeze since the Great Depression.
The International Monetary Fund cut its forecast for Russia’s economy, citing the standoff with the U.S. and Europe over Ukraine, as the government in Moscow warned this year’s growth may slow to the least since a 2009 recession.
Russia’s central bank won’t cut its key rate until at least a meeting in June, Chairman Elvira Nabiullina said, acknowledging the threat of missing forecasts for inflation, economic growth and capital outflows this year.
Russia’s economic expansion unexpectedly accelerated in the fourth quarter, driven by exports, before tension over Ukraine escalated, prompting the U.S. and its allies to impose sanctions against the country.