Russia's battered ruble currency on Tuesday approached 70 per dollar for the first time since August as oil prices sank below $40 a barrel. The ruble stood at 69.73 to the dollar and 75.85 to the euro in evening trading. Brent crude prices sank under $40 on Tuesday for the first time in almost seven years following Opec's recent decision to maintain record-high oil output levels.
The slide in oil prices and Western sanctions over Moscow's role in the Ukraine crisis have pummelled the oil-dependent Russian economy in recent months. Russian finance minister Anton Siluanov warned that next year's budget could be adjusted to the new circumstances. "With oil prices what they are today, losses of budget revenue could represent some two percent of the GDP, according to estimates from the finance ministry," Russian news agencies quoted Siluanov as saying. "This means that in order to fulfil the goal set by the president - maintain the deficit below three percent of the GDP - we will have to find new revenue sources, a more conservative approach to spending and measures to stimulate economic growth."
The ruble lost around half of its value in 2014 but recovered slightly as energy prices stabilised this year, allowing officials to claim the worst of the crisis had passed. But the recent decline has highlighted how volatile the situation remains, analysts say. Economist Vladimir Miklashevsky of the Copenhagen-based Danske Bank wrote on Twitter he believed the ruble was "still too strong given the current oil price" and suggested it could drop below 80 against the dollar.