Posted On: December 01, 2014
The Russian ruble weakened 6.6 percent to $53.95 against the U.S. dollar early Monday morning, the biggest decrease since 2003, before trading 3.6 percent lower at $51.8905 later in the trade session, Bloomberg reported.
"The ruble seems to be chasing the oil price," Artem Roschin, a foreign exchange trader at Aljba Alliance in Moscow, told the publication. "As long as the oil price continues to fall, the ruble will weaken."
Another trader said recent financial patterns indicate that the Bank of Russia may be selling foreign currency. The publication added that, as a result of the ongoing conflict in the Ukraine and a 41 percent decline in crude oil value from a peak this past June, Russia's economy is seeing its largest slowdown since 2009.
Reuters reported that last week's decision by the Organization of the Petroleum Exporting Countries to maintain production rates have led to oil futures declining to $69.60 per barrel, a five-year low.
OPEC's surprising decision will lead markets to adjust pricing under the belief that cheap oil will be available for a significant amount of time, the publication added. This will likely affect the value of Russian assets, as oil and gas contribute to about half of the nation's federal budget revenues and approximately two-thirds of its exports.
Category: Industry News
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