Ruble hits 11-month low against dollar

Rising oil prices have not propped up the Russian currency

The Russian ruble fell to its lowest exchange rate against the US dollar since last April on the Moscow Exchange on Monday.

The currency slipped to 78.53 rubles to the dollar in afternoon trading, the weakest rate since late April 2022. The ruble also traded at over 85.34 against the euro.

The ruble weakened despite a surge in global oil prices, which gained more than 6% on Monday. This happened after the OPEC+ group of oil producing countries announced a plan to slash their combined crude output by another 1.15 million barrels per day starting from May until the end of 2023, in an attempt to stabilize the oil markets. This comes on top of Russia’s extension of its voluntary 500,000bpd cut in oil output until the end of the year.

Moscow cut its oil production in retaliation for an oil price cap introduced by the West, which it said would eventually result in scarce supply and trigger uncertainty in the global market.

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Among the key factors that have been attributed to the weakening of the ruble are the state budget deficit caused by lower foreign currency revenue inflows from exports, and the ongoing recovery in imports as companies build new supply chains.

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