People walk past a sign advertising currency exchange rates in Moscow, Russia, Friday, Dec. 12, 2014. The ruble hit another record low against the dollar even after Russia’s Central Bank sought to ease the selling pressure on the currency by raising interest rates again. AP
MOSCOW, Russia—Russia’s battered ruble sank Monday to its lowest point this year as Asian and European stock markets nosedived on concerns over the Chinese economy.
Moscow’s dollar-denominated RTS stock index had tumbled 4.94 percent by the close of trading as the euro passed the symbolic 80-ruble mark for the first time since December, standing at 81.16 rubles by 1725 GMT.
The Russian currency also fell against the dollar, dropping to 70.10 rubles.
The ruble-denominated Micex closed down 1.78 percent.
The slide in oil prices and Western sanctions over Moscow’s role in the Ukraine crisis have pummelled the Russian economy in recent months, with the ruble collapsing.
Russia’s recession deepened in the second quarter as gross domestic product contracted by 4.6 percent compared with the same period last year.
The ruble has fallen more than 20 percent against the dollar in the past two months, sparking fears of more instability after a period of relative recovery.
Russia’s central bank—which did not comment on the currency’s depreciation on Monday—was forced to drastically hike interest rates in December as it battled the ruble’s plunge but has cut back the rate this year to assuage inflation fears.
The Bank of Russia’s key rate stands at 11 percent.
Inflation rose to a vertiginous 15.6 percent last month, shrinking Russians’ purchasing power. The ruble’s crash has meanwhile made imports much more expensive.
“Of course I’m not pleased that prices have gone up,” hotel worker Yulia Seleznyova told AFP. “This is directly affecting me, and I’d like the ruble to go back up.”
The ruble lost around half of its value in 2014 but recovered slightly as energy prices stabilized this year, allowing officials to claim the worst of the crisis had passed.
But the recent decline—resulting in part from a renewed fall in oil prices that hit six-year lows on Monday—has highlighted how volatile the situation remains.
“The ruble’s value is most of all influenced by oil prices,” RBK business daily quoted Alexander Muhlberger, a director at BCS financial group, as saying.
“If oil prices keep declining, then it’s clear what the ruble’s trajectory will be.”
Russian authorities have predicted that GDP will contract by 2.8 percent this year before picking up again next year.
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