The ruble weakened to a record for a second day as the European Union and U.S. widened sanctions. Bonds rose after Russia kept interest rates on hold, while Sberbank pared gains after it was added to the Treasury’s restriction list.

The currency retreated as much as 1.2 percent to 37.97 per dollar before trading 37.8855 at 6:53 p.m. in Moscow, bringing this week’s loss to 2.5 percent. Government bonds due in February 2027 rose for the first time in five days, sending the yield eight basis points lower to 9.64 percent. Exporters led stocks higher as a weaker ruble boosted prospects for earnings. Sberbank, the nation’s biggest lender, gained 0.5 percent after climbing as much as 1.9 percent.

The EU’s expanded penalties target 15 companies, including barring Rosneft, OAO Gazprom Neft and OAO Transneft from securing financing with maturity of more than 30 days. The U.S. expanded sanctions against Russia to include Sberbank, energy companies as well as five state-owned defense and technology companies.

“Market sentiment toward the ruble remains negative, and retaliatory measures from Russia seem certain,” Sberbank CIB analysts, led by Tom Levinson, said in an e-mailed note. “Such trade restrictions damage both euro-zone and Russian growth prospects and will keep the euro and the ruble pressured.”

Russia may ban some imports including clothing and used cars in retaliation, Dmitry Peskov, a spokesman for President Vladimir Putin, told Interfax on Thursday.

U.S. List

The U.S. penalties restrict Sberbank from raising debt maturing in greater than 30 days. Sberbank dollar-denominated bonds due in February 2024 fell for the first time in three days, sending the yield 10 basis points higher to 7.06 percent.

The ruble lost 1.1 percent to 49 per euro and weakened 1.1 percent against the central bank’s basket of dollars and euros to 42.8870. Russia’s currency has weakened 5.3 percent per dollar since Putin’s incursion into Ukraine started in March.

The central bank kept the one-week auction rate at 8 percent. Fifteen of 26 economists surveyed by Bloomberg forecast no change, while 11 expected an increase. Policy makers led by Chairman Elvira Nabiullina have raised rates three times this year to curb inflation as President Vladimir Putin’s standoff with the U.S. and its allies over Ukraine spurred capital flight, weakened the ruble and undercut economic expansion.

Inflation Quickens

Price growth accelerated to 7.6 percent from a year earlier in August, compared with 6.1 percent in January, according to the Federal Statistics Service in Moscow. Inflation will probably exceed 7 percent through the end of 2014, the central bank said today.

The rate decision is a “non-event” for the ruble as the geopolitical impact on it is “much stronger” and is “supportive” for OFZs in the short-term, while accelerating inflation keeps investors away in the long run, Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said.

Brent slid 0.9 percent at $97.21 a barrel Friday, extending this week’s decline to 3.6 percent. Russia receives about half of its budget revenue from oil and natural gas sales.

The Micex Index of stocks climbed 0.6 percent, trimming this week’s loss to 1.1 percent. Rosneft, Russia’s biggest oil producer, gained 1.4 percent.

The gauge has rallied 4.1 percent this month on investor optimism the peace plan brokered by Russia and Ukraine will hold. The conflict in Ukraine has killed at least 3,000 people and driven relations with the U.S. and Europe to a post-Soviet low.

Selling Stocks

“Investors sold Russian stocks on rumors about sanctions and now are buying up the cheapest equities on the fact,” Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said. “Investors are tired of sanctions and see this as the last round of penalties as Ukraine and Russia are maintaining a dialogue and the truce is holding up.”

Sixty percent of stocks in the Micex traded above their 50- day moving average Thursday, down from 66 percent the day before, according to data compiled by Bloomberg. The gauge is valued at 5.1 times estimated earnings, compared with a multiple of 11 for the MSCI Emerging Markets Index.

Alrosa, the nation’s biggest diamond producer, slid 4.7 percent. The Finance Ministry, Federal Property Management Agency and Audit Chamber are starting a comprehensive probe into Alrosa’s transactions, including the 2013 share sale to decide about the future of Chief Executive Officer Fyodor Andreev, Kommersant reported, citing unidentified people familiar with details.

Alrosa, which is state-owned, doesn’t have any information about the government’s plans to probe its management’s effectiveness, the press service said.