Russia weakened its defense of the ruble for a fourth time in a month, pushing the currency near a three-year low against the dollar, as the price of the nation’s crude oil fell by a record this week to less than $40 a barrel.
Russia has already raised interest rates twice last month and drained $143 billion from its foreign-currency reserves to arrest a 17 percent drop in the ruble since August as oil had plunged in value. Urals crude, Russia’s main export blend, slumped 20 percent this week to $39.82 a barrel, below the $70 average needed to balance Russia’s 2009 budget.
Russia is the world’s largest energy producer and the worldwide recession is cutting the value of commodities around the world.
Russia is facing its worst financial crisis since the government defaulted on $40 billion of debt a decade ago, prompting a 71 percent ruble devaluation against the dollar that eroded bank deposits.