Ruble is falling for a second day in a row as Merkel insists on sanctions, Russia’s finance minister warns of a new recession and hopes for OPEC decreasing oil supplies fade.
At 0732 GMT the RUB was down 0.6% against USD at 47.68 and 0.8% against EUR at 59.70. USDRUB is currently trading at 46.63 and EURRUB at 58.34.
Angela Merkel spoke to her parliament in Berlin yesterday. In her speech, Merkel identified Russia’s actions in regards to Ukraine as threatening to international order and breaching international law. The German Chancellor highlighted the need for the European Union to unite in order to confront this issue, Bloomberg reports. Merkel stated in a harsh stance that economic sanctions against Russia are unavoidable and are to remain as long as Ukrainian crisis continues.
Anton Siluanov, Russia’s finance minister, warned on Monday that the country could go into a new recession if oil prices continue to drop. The Telegraph newspaper reports Mr Siluanov saying that Russia will fall into recession if oil prices fall to $60 a barrel and sanctions intensify. “We are losing around $40bn per year due to geopolitical sanctions and we are losing some $90bn to $100bn per year due to oil prices falling 30%,” Mr Siluanov said in a speech in Moscow, reported by RIA Novosti news agency.
Saudi Arabia and the United Arab Emirates, both OPEC members, signaled on Wednesday that they are not going to push for the oil output decrease at the OPEC meeting today, to help recover the oil prices that have sunk by around 35% since June. Ali al-Naimi, Saudi Oil Minister said he expected the oil market "to stabilize itself eventually." Saudi Arabia and non-OPEC Russia met on Tuesday, but did not agree on jointly addressing the issue of global oil excess.
The results of today’s OPEC meeting could have a major impact on the ruble as Russia relies on oil and gas for about two-thirds of its exports and any price changes will have significant impacts. Oil is currently trading at 71.40
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