The Belarus’ ruble touched an unprecedented low after its Russian counterpart nosedived due to spiraling crude prices and weak regional economic outlook.
The Belarusian currency traded at 17,601 as of 11:59, which is 4.9 percent lower than its closing figure on Friday. The currency has shed over 33 percent of its value so far in 2015, making it one of the world’s poorest performing currencies. Much of the decline has been attributed to the weak economic growth prospects of Russia, which is the country’s biggest trading partner.
Russia, which is currently battling its first economic slowdown since 2009, has seen its economy take a beating from low crude prices and sanctions due to its involvement in the Ukrainian conflict. The Russian ruble was trading at 70.912 versus the dollar, its worst level since January.
“The devaluation is no surprise as the Belarusian ruble follows the oil price and, respectively, the Russian ruble, which itself is testing new limits,” said Vladimir Osakovskiy, a Moscow-based chief economist for Russia at Bank of America Corp in an email to Bloomberg News. “This is caused by the high dependence of Belarus on Russia.”
Kazakhstan has also suffered from Russia’s economic troubles, with the local tenge tumbling 22 percent to a new low after policymakers floated the currency. However, the tenge gained over 4 percent on Monday on bets that the market was offloading dollars hoarded to pay taxes.
Though Belarus has insignificant crude exports, it is highly reliant on refined oil exports to, and on the economic performance of Russia. The country has seen its forex reserves plunge to $4.7 billion this year, hampering its ability to support the local currency, and thus subjecting it to the market forces. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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