Russian Ruble down on decreasing oil prices

07-08-2009 13:23

The Russian Ruble fell significantly on the back of decreasing crude oil prices, which are close to a week of decreases, as a result of fears that the international recession could reduce demand for energy in the following period. Russia is not only the largest country in the world but also the number one energy supplier and Europe’s most important oil provider. The Russian currency has suffered directly from the current decline in crude oil prices, which rallied on the back of the international economy pointing to a recovery. Crude oil rates fell over 1% to a two-month low of $61.99 per barrel in New York yesterday, which affected the Russian currency negatively. The Ruble is strongly associated with commodity rates since commodities are abundantly available in Russia. The Russian central bank, Bank Rossii, regulates the rate of the Ruble in a band to avoid exporters becoming less competitive on international markets. During last week, rumors occasioned that measures could be announced in order to prevent the Russian currency to increase, while the Ruble declined as a result of increasing risk aversion and global glumness.