MOSCOW: The Russian fragile economy once again got the shock when Russia’s key stock indices slid to their lowest level since 2009, as the currency fell to a new record low of 62 against the US dollar and 77 against the euro.
Russia’s dollar-denominated RTS index has lost more than 9 percent in Monday trading, with the MICEX benchmark losing 2.6 percent – the biggest fall since March 2009.
The Russian currency also hit a historic low of 62 rubles against the US Dollar and 77 against the euro, data from the Moscow Exchange shows. The oil prices were slightly recovering during the day, but later started sliding again with Brent crude futures being at about $61.67 a barrel and WTI at $57.14 a barrel.
Overall, the Russian currency has lost about 84 percent since the start of the year, with the oil price slipping 46 percent from its peak price of $115 in June.
The fall comes despite efforts by the Central Bank of Russia making random market interventions after it allowed the currency to free float in mid-October. On December 11 it sold $478 million to help prop up the currency, with the total amount spent this year standing at about $80 billion.
Last week the regulator also increased its benchmark interest rate to 10.5 percent, hoping this will help cap inflation and stop a ruble slide.
The CBR chief Elvira Nabiullina said then that the currency was undervalued by 10-20 percent and in 2015 it will strengthen.
She also said that the regulator was ready to spend another $85 billion next year in a so-called ‘stress scenario’, should the oil price remain below $60 a barrel.
Russian foreign currency reserves have now drained to a five-year low of $416 billion.