Moscow: Russia’s weakening ruble dropped to a new low on Monday as their central bank allowed a sharp drop in the currency that has been battered by the global meltdown.
The ruble slid 1.5% on the MICEX foreign currency exchange, down to 34.8rubles against the central bank’s euro-dollar basket by 11am.
It was down to 29.3 against the dollar, a level that hasn’t been seen since 2005 and 41.6 against the euro, an all-time low. This is the third sharp drop in the national currency in just five days.
Russia’s central bank set the official exchange rates for the dollar and euro in line with trading quotes and normally does not allow the currency to lose more than 1% of its value in one day.
However, the bank has already allowed 12 depreciations since 11 November, when the supervised slide began.
The ruble has shed more than 20% of its value against the dollar since its high of 23.4 against the dollar in early August.
Amid diving oil prices and the associated market downturns, it is unclear where the slide will end as the government continues its policy of a managed float rather than releasing the ruble altogether.
The Kremlin is anxious to avoid a repeat of the 1998 financial crisis, when Russians rushed to withdraw their savings as the ruble plummeted.