MOSCOW: Russia’s battered ruble on Monday reached its 2015 low as the slump in oil prices weighs on the outlook for the country’s recession-hit economy.
The ruble stood at 72.46 against the dollar, dropping below 72 for the first time since December 2014. The Russian currency also stood at 79.55 against the euro, its lowest value since August.
The slide in oil prices and Western sanctions over Moscow’s role in the Ukraine crisis have pummeled the oil-dependent Russian economy in recent months.
The ruble lost around half of its value in 2014 but recovered slightly as energy prices stabilized this year, allowing officials to claim the worst of the crisis had passed.
The recent decline in oil prices—with Brent crude reaching an 11-year low this month—casts a shadow on the prospect of economic recovery.
Russia’s Central Bank predicted that if oil prices remain at their current level, the country’s GDP could drop 2 percent in 2016.
President Vladimir Putin assured at his annual press conference earlier this month that the country was prepared to face any economic situation despite volatility in oil prices.
Putin said that Russia’s 2016 budget had been based on an oil price of $50 per a barrel, a figure he said was an “optimistic” assessment of the situation.
The Russian leader said authorities would not rush to adjust the budget, mindful of the consequences a new budget would have on the funding of social programs.
“Many experts—including myself—think that we had touched bottom, that the worst of the crisis had passed,” former finance minister Alexei Kudrin was quoted as saying by Interfax news agency on Monday. “But today we are witnessing a new deterioration.”
“Next year will be a big challenge. Public spending inevitably will decrease because state revenue will contract,” Kudrin added.