Russia’s currency, the rouble, continues to fall hitting new all time lows in the face of collapsing global oil prices.
Point of view
This is far from being a collapse
At one stage on Thursday it was down more than five percent against the US dollar though it had regained some of those losses by the end of the trading day.
Currency dealers in Moscow blamed speculation against the rouble by financial investors. The dealers and several large banks pointed out that the volume of currency-exchange operations by individuals had not increased dramatically in recent days.
A Kremlin spokesman called the rouble moves “volatile” but said: “This is far from being a collapse.”
He added that President Vladimir Putin had no special meetings on the situation planned, though he was being kept regularly updated.
Rosbank analysts said despite the new lows for the rouble, the central bank was unlikely to actively intervene to defend the currency in the near term.
“The regulator doesn’t see risks for financial stability in current conditions,” they wrote in a note to clients.
The central bank said on Wednesday the rouble’s weakening had an “objective character” and was taking place “smoothly”.
The rouble’s slide adds to the woes of an economy, squeezed by Western sanctions, that shrank by an estimated 3.9 percent last year. It will also keep inflation high, because many of the products Russians consume are imported, and may force the central bank to postpone interest rate cuts badly needed to stimulate growth.