Ruble Drops after Brent Crude Price Declines Further

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Ruble Drops after Brent Crude Price Declines FurtherThe ruble fell along with Russian bonds for the third straight day after Brent crude price fell under $100 per barrel, while European Union considered imposing harsher sanctions on Moscow for its interference in the Ukraine conflict.

The currency declined 0.6 percent to trade at 37.3395 per dollar as of 7:12 p.m., Moscow time, the weakest point in a week. The ruble dropped 0.3 percent versus the euro to 48.1900 and slid 0.4 percent against the central bank’s benchmark euro-dollar basket to 42.2189. Yields on the nation’s 10-year bonds rose eight basis points, or 0.08 percentage point, to 9.68 percent.

German Chancellor Angela Merkel said that while she backs new sanctions against Russia, the penalties could be removed if Vladimir Putin abides by the Ukrainian cease-fire deal. Brent crude fell 1.2 percent on Wednesday by 4:25 p.m., London time, after earlier closing under $100 per barrel on Tuesday. Energy exports account for half of Russia’s budget revenue.

“Investors are disappointed that the talks of sanctions continue,” Yuri Selyandin, a Moscow-based money manager at GHP Group in Moscow, told Bloomberg News. “Declining oil is a risk to the Russian economy.”

Ukraine’s President Petro Poroshenko revealed that two-thirds of Russian troops stationed in Ukraine had been withdrawn.

EU governments met today to debate whether to extend a ban on bond and share sales to three Russian energy firms OAO Rosneft, OAO Transneft and OAO Gazprom Neft as well as nine defense firms.

Russia’s Economy Ministry projects the country’s gross domestic product to expand 0.5 percent this year, the weakest growth since the 2009 decline.To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com