Rus­sian ru­ble col­lapses to 7-month low

The Pak Banker - - BUSINESS -

The Rus­sian ru­ble plunged 2.3 per­cent on Mon­day to hit a seven-month low amid a fur­ther drop in oil prices, the coun­try's key ex­port.

The ru­ble traded at 70.7 to the dol­lar in early trad­ing in Moscow, its low­est level since Jan. 30, when Rus­sian mar­kets were hit by a com­bi­na­tion of low energy prices and Western sanc­tions.

Oil is the back­bone of the Rus­sian econ­omy and the fall of the ru­ble fol­lows a sharp de­cline in the price of crude. The U.S. oil con­tract on Fri­day dropped be­low $40 per bar­rel for the first time since 2009 and on Mon­day was down another $ 1.23 a bar­rel at $39.22. Rus­sian of­fi­cials have in­sisted that the econ­omy is strong enough to weather the de­cline.

Speak­ing re­porters on Mon­day, Eco­nomic De­vel­op­ment Min­is­ter Alexei Ulyukayev said he did not ex­pect the price of oil to stay be­low $40 a bar­rel in the long term. The Rus­sian gov­ern­ment has bud­geted all of its spend­ing on an es­ti­mated oil price of $50 a bar­rel.

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