OREANDA-NEWS. August 17, 2015. Even in the periods without a crisis, it’s the only month the ruble has tumbled consistently for the past eight years. All signs point to this August being just as negative, with options traders boosting bets on a retreat and Citigroup Inc. among those expecting ruble bonds to slide.

Their outlook reflects the deterioration in Russia’s economy, with plunging oil prices and sanctions prompting the central bank to warn Friday it may downgrade its already gloomy forecast for a 3.2 percent contraction this year. The ruble, which lost more than any other major currency last month, will come under added pressure as companies must repay \\$9.7 billion of foreign-currency debt, 26 percent more than in July.

“Right now is a scary time,” Artem Roschin, a currencies dealer at Aljba Alliance bank in Moscow, said by phone on Friday. “August is traditionally a catastrophic month for Russia. The ruble will face increasing corporate foreign-debt payments and oil is hitting new lows.”

Iran, China

Declines in the ruble coincided with oil falling in six of the past eight Augusts, and the market is cued for a repeat. The prospect of exports from Iran and reduced demand as a result of China’s manufacturing slowdown sent crude to a six-month low on Monday after the worst monthly retreat since the financial crisis. Hedge funds have pared bullish bets to the least in five years.

The ruble advanced for the first time in four days, rising 0.9 percent to 62.9260 by 4:28 p.m. in Moscow, after slumping 10 percent in July.

Options show the probability of the ruble weakening beyond 65 against the dollar this month had quadrupled since Thursday to 34 percent on Monday. Volatility was at its highest in a month on Monday.

While Russia’s bonds have been the best performers in emerging markets this year, spurred by five interest-rate cuts, falling crude could lift yields on longer-dated OFZs to 12 percent, Luis Costa, a strategist at Citigroup in London, said by e-mail on Monday. Benchmark January 2028 bonds declined yesterday, increasing the yield to 10.87 percent.

No Pressure

The ruble’s depreciation has the benefit of boosting the value of Russia’s dollar-based oil and gas sales. Yet it also jeopardizes the economy’s recovery by contributing to inflation, which constrains the central bank’s ability to stimulate growth by cutting interest rates.

The Bank of Russia said its provision of foreign currency through repos means companies have accumulated significant liquidity. This, coupled with the halt in foreign-currency buying by the central bank, will ensure there’s no additional pressure on ruble in the third and fourth quarters of this year, the regulator said in an e-mailed statement on Friday.

The currency probably won’t weaken significantly further as oil is unlikely to collapse, companies have prepared to make their foreign-debt payments and the central bank may help companies further through foreign-exchange auctions, Evgeny Shilenkov, the head of trading at Veles Capital LLC in Moscow, said by phone on Friday.

The currency has weakened 2.2 percent on average in August since 2007 while oil slid 1.9 percent. The slump in oil may have further to go as U.S. refineries typically slow down from August through October for maintenance.

“All of the negative factors have come together,” Anton Tabakh, a director at Moscow-based RusRating, said by phone Monday. “People are looking at sliding oil, and there’s a sense that the budget and a weaker ruble are a bigger priority for the central bank now than inflation targeting.”