Russian ruble bounces off another record low

AP News
Posted: Dec 03, 2014 8:55 AM
Russian ruble bounces off another record low

MOSCOW (AP) — The Russian ruble scrambled off a record low on Wednesday amid speculation that the central bank could intervene in the market to support the currency.

The ruble has lost more than 40 percent of its value this year, hit by low oil prices and Western sanctions against Russia over its role in Ukraine's crisis.

After touching yet another record low, the ruble recovered somewhat to trade 1.2 percent higher on Wednesday, at 53.2 rubles, as some traders speculated that the Russian Central Bank could act to support it.

The ruble is among the most battered currencies this year, along with the Ukrainian hryvnia. Its decline was compounded by a collapse in oil price, a crucial export for the Russian economy.

Monetary officials in the past weeks had refused to intervene to stop the ruble's slide. The central bank revealed on Wednesday, however, that it had intervened Monday to stem the currency's decline by selling $700 million and buying rubles in the open market. The currency had fallen by as much as 6 percent at one point on Monday.

President Vladimir Putin on Wednesday signed the government budget for the next year. It runs an $8 billion deficit for the first time in years and balances on the oil price of $100 per barrel — Brent crude currently hovers around $70.

A top central bank official, however, said earlier this week that they have prepared new economic forecasts based on a price of $60 per barrel.