Ruble, micex extend gain as central banks cut dollar swaps rate

The ruble and Russian equities extended gains after the Federal Reserve and five other central banks agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points and extend their authorization through Feb. 1, 2013.

The ruble was 1.1 percent stronger at 30.9483 against the dollar and the 30-stock Micex Index added 2.3 percent to 1,487.64 as of 5:06 p.m. in Moscow.

The new interest rate has been reduced to the dollar overnight index swap rate plus 50 basis points, or half a percentage point, from 100 basis points, the Fed said in a statement in Washington. The Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank are involved in the coordinated action, the Fed said.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the statement said.