Russia’s Ruble Hits New Bottoms

The Russian ruble declined to the new record low level against the euro and the 2-year low against the U.S. dollar today as the country’s central bank allowed further depreciation of the ruble to stimulate the exporters.
The Bank of Russia allowed the national currency to devalue by about 1 percent against the euro-dollar benchmark basket for the 11th time since November 11 today. The ruble fell about 1.3 percent against the euro and 1.1 against the U.S. dollar. The total loss against the dollar is 24.6 percent since its peak on July 15 and 19.9 percent against the euro since its peak value on October 28.
With the Urals blend of crude oil losing almost 77 percent of its value, which is the Russia’s main export, the country will experiencing one of the worst recession next year with the high probability of the budget deficit. The lower currency rates will stimulate the exporters’ production of oil and metals (another important part of the Russia’s exports).
USD/RUR rose from 27.777 to 28.667 as of 10:09 GMT today, while EUR/RUR went up from 38.770 to 40.324.

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