Ruble drops to 2015 low amid oil price slump
Russia's Central Bank predicts a 2 percent drop in GDP by the year 2016 if oil prices remain same
PHOTO: REUTERS
MOSCOW:
Russia's battered ruble on Monday reached its 2015 low as the slump in oil prices weighs on the outlook for the country's recession-hit economy.
The ruble stood at 72.46 against the dollar, dropping below 72 for the first time since December 2014.
The Russian currency also stood at 79.55 against the euro, its lowest value since August.
Exports: TDAP to search for markets in Russia
The slide in oil prices and Western sanctions over Moscow's role in the Ukraine crisis have pummelled the oil-dependent Russian economy in recent months.
The ruble lost around half of its value in 2014 but recovered slightly as energy prices stabilised this year, allowing officials to claim the worst of the crisis had passed.
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The recent decline in oil prices -- with Brent crude reaching an 11-year low this month -- casts a shadow on the prospect of economic recovery.
Russia's Central Bank predicted that if oil prices remain at their current level, the country's GDP could drop 2 percent in 2016.
Replacing the Dollar
"Many experts -- including myself -- think that we had touched bottom, that the worst of the crisis had passed," former finance minister Alexei Kudrin was quoted as saying by Interfax news agency.
"But today we are witnessing a new deterioration."
"Next year will be a big challenge. Public spending inevitably will decrease because state revenue will contract," Kudrin added.
Russia's battered ruble on Monday reached its 2015 low as the slump in oil prices weighs on the outlook for the country's recession-hit economy.
The ruble stood at 72.46 against the dollar, dropping below 72 for the first time since December 2014.
The Russian currency also stood at 79.55 against the euro, its lowest value since August.
Exports: TDAP to search for markets in Russia
The slide in oil prices and Western sanctions over Moscow's role in the Ukraine crisis have pummelled the oil-dependent Russian economy in recent months.
The ruble lost around half of its value in 2014 but recovered slightly as energy prices stabilised this year, allowing officials to claim the worst of the crisis had passed.
Global Slowdown: BoJ to downgrade economic forecast
The recent decline in oil prices -- with Brent crude reaching an 11-year low this month -- casts a shadow on the prospect of economic recovery.
Russia's Central Bank predicted that if oil prices remain at their current level, the country's GDP could drop 2 percent in 2016.
Replacing the Dollar
"Many experts -- including myself -- think that we had touched bottom, that the worst of the crisis had passed," former finance minister Alexei Kudrin was quoted as saying by Interfax news agency.
"But today we are witnessing a new deterioration."
"Next year will be a big challenge. Public spending inevitably will decrease because state revenue will contract," Kudrin added.