Ruble falls to nine-month low to dollar on weakening oil

The Russian ruble hit a nine-month low against the dollar and edged down against the euro on Monday, as banks sold the local currency as prices fell for oil, the country’s key export.

The official ruble rate fell 35 kopecks to 30.91 to the dollar and edged down six kopecks to 42.25 to the euro.

The value of the bi-currency basket, comprising $0.55 and 0.45 euros, increased by 36 kopecks to 36.03 rubles.

“This completely fits our understanding of the ruble’s dynamics, including the correlation between the euro and the dollar on the market, the absence of support from oil and the presence of more fundamental risks such as political uncertainty in Russia,” said Investcafe analyst Anna Bodrova.

She said that the ruble could fall as low as 31 to the dollar this week.

“But the ruble/dollar pair is likely to trade in the 30.20-30.50 range in the next two months because the central bank has the power to limit even a smooth devaluation of the national currency for a while,” she said.

On the international foreign exchange market, the euro lost about one percent to the dollar at 1.3757 as the EU’s Economic and Financial Affairs Council failed to work out measures to fight the debt crisis in Greece over the weekend.

The International Monetary Fund said Athens had to take further austerity measures to win the next release of bailout funds and avoid bankruptcy.

Forex Club Chief Dealer Alexei Trifonov said the euro would move to 1.36 to the dollar on Monday.

“The dollar and other safe haven currencies are expected to strengthen amid eurozone problems and the absence of action to solve them,” Trifonov said.

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