The ruble is getting slammed.
At around 11:20 a.m. ET Wednesday, it got as weak as 62.03 rubles per dollar after closing 56.71 on Tuesday. This was a nearly 5% plunge.
It’s currently trading at around 60.82.
The currency’s drop coincides with Brent oil falling to a 5.5-year low on Wednesday — down as low as $US56.09.
For the year, the ruble fell approximately 40% against the dollar.
Today’s plunge follows the Economy Ministry’s announcement on Monday that GDP contracted by 0.5% from a year earlier, following a 0.5% increase in October.
“This is linked to sanctions first of all, oil and the panic we saw on the market in December. The damage to the banking system and consumer sentiment will take a long time to repair,” Dmitriy Polevoy, the chief economist for Russia and the CIS at ING Bank of Moscow, told the Moscow Times.
Right now, Russia is on the edge of its first recession since 2009. Its economy took a serious beating following the sanctions imposed by the EU and US over the situation in Ukraine and the plunging oil prices.
Following the sharpest fall in Russia’s HSBC composite output index since May — down to 47.6 in November from 49.1 in October — analysts began expressing pessimistic views about the state of the economy.
“The PMI survey found the Russian economy risking not only prolonged, but deep recession. We expect 1.5% GDP decline in 2015, but are prepared to see even deeper decline if current negative trends by the PMI survey continue,” writes Alexander Morozov, the Chief Economist of Russia, CIS and the Baltics at HSBC.