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Ruble Continues Fall, Lowest Level Since 2009

Published: January 28, 2014 (Issue # 1794)



  • A ruble exchange office sign displaying dollar and euro rates on Monday.
    Photo: Igor Tabakov / SPT

The ruble continued its fall in Monday morning trading, reaching a historic low of 47.5 rubles to the euro.

The currency is now at its lowest level against the dollar since March 2009, when it plummeted on fears of a deepening recession in the country.

On Friday, the country’s central bank widened the trading corridor against the euro-dollar basket amid a slide in the ruble of over 3.5 percent since the beginning of the year. The new limit was surpassed Monday morning.

Russia measures the ruble’s performance against a weighted basket of 55 percent dollars and 45 percent euros.

You may also be interested in: Economist Advises Russians to Dump Ruble, Buy Hard Currency

The central bank, which controls the value of the ruble through interventions on the currency market, has repeatedly widened the target trading band for the ruble in recent months.

A weaker ruble means larger profits for Russian exporters and a windfall for the state budget, which is dependent on revenue from commodity exports.

Economic Development Minister Alexei Ulyukayev said Monday that a natural weakening of the ruble could boost the economy by increasing the competitiveness of Russian businesses, but added that he was opposed to an artificial depreciation.

You may also be interested in: Why the Ruble Is Sinking

Experts have suggested that the bank may be forced to modify its methods of maintaining the corridor, but doing so now might prompt a further fall in the currency.

The central bank is planning to move toward a free floating ruble by the end of this year.

The central bank’s intervention in trading to prop up the ruble has more than doubled in the last week to about $400 million per day.





 


ALL ABOUT TOWN

Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russia’s most remarkable poets who, in a fate eerily similar to Pushkin’s, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontov’s short yet prolific career. Check the Lermontov Library System’s website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Club’s weekly meeting tonight at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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