Dec 1, 2014 3:26 AM
Russian ruble takes a nosedive on low oil prices
The Associated Press
MOSCOW (AP) Russia's ruble hit a new all-time low on Moscow, dropping more than 3 percent as declining oil prices and the conflict in eastern Ukraine are weighing in on the Russian economy.
The Russian currency traded 52 rubles against the dollar at the opening on Monday after shedding 15 percent in the previous week. The ruble was also down 2 percent against the euro.
Battered by low oil prices and the conflict in eastern Ukraine, the ruble has been declining throughout the year, losing about 42 percent of this value since January.
The Kremlin, which in the past supported the exchange rate by buying up the rubles, says it considers the pressure on the ruble to be speculative and is happy for a ruble free float.
Oil prices, the backbone of the Russian economy, dropped roughly 25 percent since the summer. Brent crude, an international benchmark, fell 3 percent to $70.15 a barrel on Friday.
The latest slide follows OPEC's decision to leave its production target at 30 million barrels a day. Member nations of the cartel are worried they'll lose market share if they lower production, which could have helped to push up the price.
"In the short term, the Russian market is a victim of OPEC's apparent decision to reduce the volume of high-cost production through lower prices," Moscow-based investment bank Sberbank CIB said in a morning note. "The market and the ruble will not stabilize until oil does."