Posted On: January 13, 2015
The ruble fell 3 percent on Tuesday to 65.0995 per U.S. dollar, marking its lowest rate in the past month, Bloomberg reported. The currency continues to struggle as oil prices fell 11 percent last week and as much as 4.6 percent to $45.23 per barrel on Tuesday.
The yield on five-year ruble bonds increased 75 basis points to 17.43 percent, which was its highest rate since Dec 16. Yields on five-year bonds have gained 2.02 percent since Jan 1. Five-year credit default swaps rose 23 basis points to 621.
"The ruble could fall further at current oil prices," Vladimir Bragin, head of research at Alfa Capital in Moscow, told Bloomberg. "The decline in oil is negative for the Russian economy. Investors are hoping for stabilization."
Considering the decline of oil prices and Russia's ongoing sanctions in relation to its involvement in Ukraine, the Central Bank of Russia projects an economic depreciation of up to 5 percent in 2015, according to The Wall Street Journal.
The publication noted that the ruble has fallen 20 percent since the beginning of the year. Bernd Berg, an emerging market strategist with Societe Generale, said that the country will soon fall into an even deeper recession.
Category: Industry News
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