Tuesday, October 7, 2014

Russia: Ruble Plunges to 40.05 to US$

According to AFP, Russia's ruble plunged on Monday (October 6), reaching an all-time low of more than 40 rubles to the dollar.
The ruble slumped to 40.05 to the US$ shortly after Moscow markets opened, the first time the Russian national currency weakened beyond the psychologically important rate of 40 to the dollar.
The currency slightly bounced back to 39.95 rubles to the dollar in the afternoon.
The euro stood at 50.11 rubles in the afternoon, but remained above the record low hit after Russia annexed Crimea in March.
COMMENT: Analysts at VTB Capital warned that breaking through the psychologically key rate of 40 rubles to the dollar "might ignite FX (foreign exchange) concerns among households."
Over the past months the ruble has been under huge downward pressure owing to a host of factors including Western sanctions imposed against Russia over the Ukraine crisis and falling oil prices.
The Central Bank, which has been weaning the currency off support, intervened last week to keep the ruble sliding too far too fast.
Last month authorities told Russians not to panic as the battered ruble plunged and consumers said they were concerned that a weaker currency would drive up inflation and make foreign currency-denominated purchases increasingly unaffordable.

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