Category: Russia

AP Photo/Alexander Zemlianichenko MOSCOW (AP) — The Russian ruble plunged 2.9 percent on Monday to hit a seven-month low amid a further drop in oil prices, the country’s key export. The ruble was trading at 71.04 to the dollar at the close of trading in Moscow, its lowest level since Jan. 30, when Russian markets were hit by a combination of low energy prices and Western sanctions. After the market closed, the ruble recovered slightly in futures trading in an indication that it may recover some of its losses. 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. The ruble’s slide was accompanied by falls in the […]

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Russia lowered its economic forecasts for this year and next year as a renewed plunge in energy prices sank the ruble and sanctions over Ukraine looked set to persist. Gross domestic product in the world’s largest energy exporter will fall 3.3 percent in 2015 before rebounding as much as 2 percent in 2016, Economy Minister Alexei Ulyukayev said Tuesday in Kuala Lumpur, the Interfax news service reported. The ministry had earlier projected a 2.8 percent contraction followed by 2.3 percent growth. Russia’s slump reached a “fragile” bottom last month, Ulyukayev said, predicting an improvement in the economy in the fourth quarter. “I don’t think we’ll go any lower but it’s hard to say when we’ll see significant growth.” Russia, mired in its first recession in six years, is battling a new wave of oil-price weakness that’s sent the ruble to its lowest level against the dollar in seven months. […]

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An employee counts Russian ruble banknotes at a private company’s office in Krasnoyarsk, Siberia, December 17, 2014. Russia’s Prime Minister Dmitry Medvedev said on Saturday that the government and central bank were preparing measures to boost foreign currency sales in response to the weakening ruble. His comments suggest Russia is again putting pressure on major exporters to help buttress the ruble by selling more of their foreign currency, a tactic used last December when the government ordered state exporters to sell part of their foreign currency over an agreed time frame. "Naturally we, I mean the government, will help the central bank in the sense of additional foreign currency inflows," Medvedev said. "In the near future we will launch foreign currency sales by our largest exporters, which will affect the ruble’s rates. So we, together with the central bank, will undertake a definite collection of agreed measures." It was […]

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Russian bonds fell for a third day and the ruble retreated as Commerzbank AG recommended selling the nation’s local debt as sliding oil prices make it less likely that the central bank can press on with interest-rate cuts The decline in five-year OFZ bonds lifted the yield three basis points to 11.26 percent, set for the highest level in a month. The currency weakened 0.5 percent to 65.8560 per dollar by 6:08 p.m. in Moscow, a six-month low as President Vladimir Putin said he discussed the currency on Tuesday with Prime Minister Dmitry Medvedev. Assets in the world’s biggest energy exporter are under pressure as oil trades in a bear market, diminishing the scope for deeper reductions in borrowing costs after the Bank of Russia lowered them by 600 basis points this year. Brent oil fell for a fourth day, dropping 0.4 percent to $48.53 a barrel, headed for […]

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Russia’s central bank may pause its monetary easing cycle if oil prices fall to $40 a barrel, Kremlin economic aide Andrey Belousov said in an interview. “If the situation on the foreign-exchange market changes as a result of a significant drop in oil prices — to $40 a barrel, with fluctuations between $40 and $45 — then the central bank will probably halt the process of cutting the rate,” Belousov said by phone on Tuesday. The rout on commodities markets may force the central bank to change tack if it reignites inflation and further destabilizes the ruble, which is trading at a six-month low. Policy makers led by Elvira Nabiullina have lowered their benchmark interest rate by a cumulative six percentage points to 11 percent in five steps this year after an emergency increase in December. Belousov, a former economy minister who replaced Nabiullina as President Vladimir Putin’s aide […]

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A basic barometer of economic activity in this tidy town south of Moscow is the pirozhok, a small pie filled with cabbage and meat that is a staple of the Continue Reading

The ruble fell toward a six-month low amid renewed weakness in oil prices, threatening to end the Russian central bank’s series of interest-rate cuts aimed at reviving the economy. The currency slid 0.5 percent to 65.3010 per dollar by 4:32 p.m. in Moscow, dropping for a third day. The ruble has lost a quarter of its value since reaching this year’s peak on May 18 as the central bank stepped up foreign-currency purchases to build reserves. Brent crude fell 0.1 percent to $49.15 a barrel on Monday, trading below $50 for the third day after entering a bear market last month. Russia’s economy is heading for an estimated 3.6 percent contraction this year, hemmed in by lower oil prices and international sanctions tied to its role in the Ukraine conflict. Policy makers have reduced the benchmark interest rate five times by a total of 6 percentage points since making […]

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