Russia’s ruble plunges to historic low against euro
Russia’s ruble on Monday slumped to a new all-time low against the euro as the spillover from the Ukraine crisis and falling oil prices pummelled the economy.
The ruble slumped to 51.27 to the euro, breaking through a previous low seen in March in the wake of Moscow’s annexation of the Black Sea peninsula of Crimea from Ukraine.
The national currency also dropped against the dollar to a rate of 40.42, according to the Moscow Exchange, scudding along beneath the psychologically important mark of 40 to the dollar that it broke through last week.
The fresh slump came after Russia’s central bank chief Elvira Nabiullina said the regulator had pumped some $6 billion into propping up the currency over the past ten days.
Nabiullina however ruled out establishing a fixed exchange in a bid to stop the decline.
“Setting a fixed exchange rate would, in my opinion, be a counterproductive decision and in contradiction of market factors,” Russian news agencies quoted her as saying.
VTB Capital warned that an increasingly jittery population was beginning to watch the ruble “more closely” but said that there was not yet a rush to convert rubles into foreign currencies.
Russia’s economy has been hit hard by the fallout from the Ukraine crisis, that has seen the EU and US impose the harshest sanctions on Moscow since the end of the Cold War.
Capital flight from the country has rocketed and is set to reach some $100 billion this year, according to the International Monetary Fund.
The current turmoil has been exacerbated by a recent fall in oil prices, with Russia’s energy-fuelled economy heavily reliant on oil revenues.