The Ruble Plunged As Oil Crashed

Elena HolodnyJan 6, 2015, 04:16 IST

The ruble got slammed again on Monday.

The currency ended the day at around 61.61 per dollar, around 6.4% weaker against the dollar.

During the day, the currency got as weak as 62.0 rubles per dollar.

By comparison, on the first day of trading in 2014 the ruble was at 32.03 rubles per dollar.

The currency's drop coincides with crude oil crashing below $50 per barrel on Monday, the lowest price for the commodity since April 2009.

Oil fell as low as $49.89, a more than 5% decline on the day.

Over the course of 2014, the ruble fell approximately 40% against the dollar.

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.

In December, Russia's HSBC composite output index plunged to a seven-month low of 47.2 from 47.6 in November. Any ready below 50 signals contraction.

"The Russian economy accelerated its contraction in sequential terms in December," writes Alexander Morozov, the Chief Economist of Russia, CIS and the Baltics at HSBC. "It follows from the December PMI surveys that the probability of a deep recession in Russia in 2015 has increased. How deep and long the forthcoming recession will likely to be, compared to the last one? The recession of 2008-09 lasted for 4 quarters and caused 7.8% decline in GDP in 2009."

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The Ruble Plunged As Oil Crashed