Rouble devalued again

MOSCOW (Reuters) – Russia’s central bank allowed the eighth mini rouble devaluation of the month on Friday, a day after the price for the country’s main export commodity, oil, neared $30 per barrel, the lowest level since 2004.

The collapse of oil and other commodities prices coupled with the global economic slowdown and a capital flight from emerging markets turned the rouble in a sure-fire depreciation bet from the previous appreciation bet in less than six months.


The central bank has spent more than $100 billion defending the currency in the last 4-1/2 months to prevent a run on banks and spreading the panic among the population, which still has sour memories of saving losses in the 1990s and Soviet times.

Faced with an economy potentially heading for its first recession in a decade, Russia started on a gradual depreciation path six weeks ago to preserve reserves — still the world’s third largest at $451 billion (306 billion pounds) – which will be needed to support the real economy.

Russian authorities, which have initially denied they would allow the rouble to fall sharply, have softened the tone in the past weeks, saying the rouble cannot remain strong in a situation of a downturn on global commodities markets.

Reuters