The ruble has been hit by a strong dollar and an oil price slide that appears to be gathering pace. Photo: Yevgeny Razumny / Vedomosti
The ruble fell further Monday as it passed the psychologically important 40 ruble mark for the first time since the currency was restructured after the 1998 default.
Shortly after 10:00 a.m. in Moscow the ruble dropped to 40.046 against the greenback, the latest in a series of historic lows recorded this year amid heightened international tensions over Ukraine and Western sanctions on Moscow.
The ruble has lost 21.9 percent of its value against the dollar this year and dropped 14.9 percent in the third quarter, its worst quarter performance since 1999. Pressure on the ruble increased last month as worries over the Russian investment climate following the arrest of billionaire Vladimir Yevtushenkov exacerbated the effect of the Ukraine crisis.
The Russian Central Bank, which is looking to introduce a free floating ruble next year, said last week that it had spent $17 million on Oct. 1 to prop up the currency after it breached the upper limit of the regulator’s trading corridor.
The ruble has been hit by a strong dollar and an oil price slide that appears to be gathering pace. Brent crude oil sank 5 percent last week and was trading below $92 a barrel Monday morning.
“The fall in the price of oil to the level of $92 a barrel for Brent is now impossible to ignore,” analysts at ING bank in Moscow wrote in a Monday note to investors.