Wheels Finally Fall Off Russian Ruble
A strong dollar, declining oil prices, and a weak economy have finally taken the wheels off the Russian ruble. It has finally sunk in that the Central Bank is not going to act in defense of the ruble anytime soon. And on Thursday, the currency fell 3.87% to RUB46.68, it’s weakest level in 14 years.
Last month, the Finance Minister, Anton Siluanov, said that the government was not going to blow through its reserve fund to keep the ruble from weakening.
The ruble is down 12.4% against the dollar in the last month, making it the worst commodity currency in the market.
“Our near-term expectation is for the ruble to reach 45, but it could move to 47 or higher,” said Vladimir Signorelli, founder of investment research firm Bretton Woods LLC.
The weak ruble will worsen an already frightening inflation picture. Annualized core inflation as of September was 8.5%, well above the central bank’s targeted rate of 5%.
Source: Forbes – Wheels Finally Fall Off Russian Ruble
