Rouble sees steepest crash since 1998 after early oil price drop

 
Chris Papadopoullos
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Russia depends heavily on oil both in its export market and for government revenues
THE RUSSIAN rouble yesterday suffered its sharpest fall since the nation’s 1998 financial crisis.

The currency dived by 7.6 per cent against the dollar early in the day before staging a recovery. The rouble began the day worth $0.02015 but had dropped to $0.01861 by 11:40am.

Late last night the rouble was worth $0.01955. The movements were correlated with a similar crash and subsequent recovery in oil prices. Brent crude – extracted from the North Sea – sank to a day low of $67.53 per barrel, its lowest since October 2009. However, the price later rallied and was $72.90 a barrel at 10:30pm.

The dip interrupted the proposed takeover of Irish firm Petroceltic by Dragon Oil. Shares in Petroceltic dived nearly 35 per cent on the news. Russia has seen a steady decline in the value of its currency since the summer when prices neared $0.03 – nearly 50 per cent higher than the current value.

The decline appears to be caused by economic sanctions on Russia relating to the conflict in Ukraine and falling oil prices which reduce Russia’s export revenues.

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