With Russia facing the possibility of its first recession in a decade, the rouble has continued to fall in value. On Monday, Moscow allowed the ninth mini-devaluation of the currency this month. The central bank has been using its foreign currency reserves to stop a dramatic slump but is permitting a gradual depreciation.
Ten years ago, one euro was worth 25 roubles and a dollar was worth 20 roubles. Now one euro will get you 41.6 roubles and the US dollar is worth 29 roubles. The downward pressure on the currency comes from slumping oil prices, a worsening economy and investors’ flight from emerging markets. One Muscovite said they’ve seen worse: “I do have some fears now, but the current situation is probably not like 10 years ago, when there was a default by the state, plus the size of our gold and foreign exchange reserves is now much bigger.” The rouble is almost 20 percent lower than its historic high – reached in August – while the price of oil, the main export of Russia’s resource-focused economy, is down over 70 percent in that time. Analysts are predicting a further 10 percent devaluation of the rouble in January. The issue is little discussed on state-controlled television channels. But government officials have admitted that rising unemployment and falling real disposable income in Russia could lead to social unrest in the new year.