Ruble rises slightly amid long term decline

Posted On: January 15, 2015

The ruble rose 0.3 percent on Thursday to 64.5700 per U.S. dollar, Bloomberg reported. After declining by 41 percent against the U.S. dollar throughout 2014, the currency has fallen 6 percent in the new year.

On Dec 16, the Central Bank of Russia increased the key interest rate from 10.5 percent to 17 percent. In a recent interview with the publication, Economy Minister Alexei Ulyukayev said that a smaller raise would have been sufficient if the bank had boosted the rate at an earlier date.

"It's an acknowledgement they can't allow the extreme excess volatility in the ruble compared to the oil price that we saw in December," Clemens Grafe, chief economist at Goldman Sachs Group Inc., told Bloomberg. "People will take comfort by this acknowledgement that the top bench is being further strengthened."

Reuters reported that the ruble continues to be hampered by the ongoing volatility of crude oil, which depreciated in value by more than 2 percent on Thursday. Analysts from Bank Zenit noted that Wednesday's oil gains indicate that the ruble is almost exclusively rising and falling with the price of oil. Standard & Poor's rates Russia with a negative outlook, just one level above "junk" status.

Category: Industry News

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