Renewed Slide in Oil Price Hits Russian Ruble Again

The ruble suffered its second consecutive day of heavy losses on Tuesday, hitting a new record low when the dollar poked above 54 against the limping currency despite assurances from Russia’s finance minister that the selloff has run too far.

The ruble sank to 54.11, dropping by about 5.5% on the day. The move mirrored the ruble’s 6% drop Monday, the worst session since the 1998 financial crisis, with the currency hit by the recent slump in oil prices, which will pinch Russia’s commodity-dependent budget.

There was no sign of intervention by the central bank to try and slow the tide Tuesday, but official dollar selling was reported by traders earlier in the week. The central bank does not comment on interventions and is set to publish data on Monday’s activity early Wednesday.

“It is quite unnerving that the central bank does not comment on interventions. If they had said they intervened yesterday, the impact would have been bigger. The market has doubts that it was the central bank that intervened yesterday, which creates additional pressure on the ruble,” said Sergei Romanchuk, chief trader at Metallinvestbank in Moscow.

Earlier Tuesday, Finance Minister Anton Siluanov told reporters that the ruble is undervalued.

“According to finance ministry estimates, the current [ruble] rate matches an oil price of substantially below $60 per barrel. With oil at $80 per barrel an equilibrium [dollar] rate will be below 45 rubles in 2015,” Mr. Siluanov said.Click for video