Any hope of respite for Russia’s currency has been dashed this morning as the rouble continued its steep decline against the dollar and the euro.
The currency weakened on the back of news that oil prices were falling again on reports that Saudi Arabian state oil company, Saudi Aramco, was cutting prices to US buyers in a bid to compete with the shale oil boom in the country.
The recent falls have more than wiped out the flash rally last week, which saw the rouble suddenly reverse its declines. That rally was rumoured to have been driven by the prospect of a central bank rate increase that was aimed at choking off the flood of foreign currency outflows that totalled $US85 billion (€68 billion) over the first 9 months of 2014.
Despite the Russian central bank surprising markets by hiking rates by 150 basis points, it has failed to halt further rouble weakness. The news will be a major worry for Russian businesses that face $US35 billion (€28 billion) of debt repayments in December alone.
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