The oil price collapse pushed Russia’s rouble to new record lows near the 50 per dollar mark on Friday, while currencies in energy producers from Nigeria to Malaysia hit multi-year or all-time lows.
Brent crude has fallen below $72 a barrel after the OPEC club on Thursday decided against production cuts, broadening the divide between energy-producing and -importing emerging markets.
In Russia, where energy comprises two-thirds of exports, the rouble slumped 1.2 percent and headed for its biggest monthly loss since 2009. Moscow dollar-denominated stocks fell 2.6 percent, set for their fifth month in the red.
Russian bonds were also sold off, with dollar debt spreads over U.S. Treasuries at three-year highs and local 10-year yields surging to levels last seen in December 2011 .
“The market reaction is very conventional. We see divergence between the winning countries over the decline of oil prices and the losing countries,” HSBC strategist Murat Toprak said.
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“The rouble has overshot – but if the oil price keeps going lower like that, this momentum may continue.”
Three-month forwards meanwhile imply a 10 percent depreciation in oil-rich Kazakhstan’s tenge.
In Nigeria, the naira lost 1.3 percent and dollar bonds fell, just like in Angola .
Earlier, Malaysia’s ringgit hit five-year lows, forcing the central bank to step in.
Societe Generale advised buying Turkish lira versus rouble as a proxy for oil.
“For a vast majority of EM countries, the sharp decline in oil prices may help reduce macro vulnerabilities,” SG wrote. “This means local rates are going to perform strongly in high-yielding markets where inflation is set to decelerate.”
Indian and Turkish local 10-year yields plunged to 16- and 17-month lows on expectations that cheaper oil will lead to policy easing.
Non-oil currencies were kept in check by a firmer dollar , though Indian stocks touched new record highs, Chinese equity markets rose 2 percent while Istanbul hit six-month peaks.
But heavy falls in oil firms such as Hungary’s MOL , Poland’s PGNiG and Romania’s OMV Petrom took a toll on bourses in these countries.
