Russian ruble tumbles as oil prices crash

PTI, Mar 9, 2020, 2:00 PM IST

Moscow: The Russian ruble on Monday tumbled to a four-year low amid a crash in oil prices following a collapse of talks between OPEC leader Saudi Arabia and Moscow.

The ruble fell by over 7 per cent to trade at nearly 74 to the US dollar, a rate last seen in early 2016.

Saudi Arabia launched an all-out oil price war Sunday with the biggest cut in its prices in the past 20 years after OPEC and its allies failed to clinch a deal to reduce output.

A meeting of main producers was expected Friday to agree to deeper cuts to counter the impact of the coronavirus but Moscow refused to tighten supply.

In response, Riyadh slashed its price for April delivery by $4-$6 a barrel to Asia and $7 to the United States.

On Monday, a public holiday, Russia’s central bank said it was halting foreign currency purchases for the next 30 days.

This decision has been taken to increase the predictability of actions of monetary authorities under the conditions of significant changes in global oil markets.

The central bank would continue monitoring the situation and was ready to use “additional instruments in order to maintain financial stability.”

Russia has entered a politically sensitive period after President Vladimir Putin in January proposed an overhaul of the constitution, the first changes to the basic law since 1993.

A vote on the controversial reforms that Putin said should ensure the country’s future for decades to come is set for April 22.