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Rouble plunges against oil prices decline
September 5, 2008 14:19


On Thursday the rouble dived against the dollar, which increased by record 34 kopecks. The Russian national currencys fall is caused by foreign investors who hurriedly convert roubles to dollars and Euros and leave the Russian stock market due to political risks.

The dollar has climbed to the highest point for the last six months, having increased by 34.05 kopecks to 25.21 roubles per dollar. The euro has also strengthened its positions to 36.59 roubles per 1. On the whole, the U.S. currency have soared 63.75 kopecks this week.

Analysts explain the sudden drop of the rouble as the price Russia has to pay for the military operation in South Ossetia. Another reason is that oil prices are going down at the moment, since the Russian economy strongly depends on raw materials including gas and metals. Soaring commodity markets in the first half of 2008 pushed the Russian currency against the dollar and the euro, though now the situation has changed.

The rouble is now under pressure due to uncertainty of the European leaders, who are not ready to impose any economic sanctions on the Russian Federation, though deeply concerned with its growing influence on the international arena and military strength. The foreign businessmen are recommended to cut investments in the Russian economy and flee the Russian market.

The Central Bank of Russia is taking time, not eager to help speculators. Thus, the rouble rate has dropped to 30.4 roubles against the dual currency basket, which is the lowest mark since May of 2006.

However, the American and the European currencies are likely to fall soon, say analysts.

Bad news on growing unemployment rate in the USA may adversely affect consumption spending in the country and consequently make the dollar go down. By experts estimate, the Euro is expected to fall to 36-36.20 roubles per Euro, while the dollar will probably stay at the rate of 25 roubles per dollar.

The reaction of the Russian stock markets is mostly negative shares of Russian oil and gas companies have already plunged. Gazproms shares are trading 6.25% lower than the day before, Lukoil lost 4.78%, Rosneft slid 4.17%, Surgutneftegaz plunged 4.2%. The news on Russian key steel and metal companies is not encouraging: Severstal tumbled 6.94%, Mechel fell 5.12%, and Norilsk Nickel is down 6.1%. The banking sector also has to face the drop of the market the main performers are trading sharply lower today Sberbank plunged 4.07%, VTB slid 2.83%.

Sources:

    www.vedomosti.ru
    www.gazeta.ru


Olga Pletneva


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