Russia: Rouble marks strongest depreciation in last three years
January 1, 2012
By 31 December, the Russian rouble (RUB) had weakened 2.2% over the last day of the previous month and was trading at RUB 32.02 per USD. The December drop followed on a 4.8% drop in November and marks a continuation of the downward trend in place almost uninterruptedly since August 2011. On a year-on-year basis, the rouble fell 5.1% against the U.S. dollar in 2011, which represents its greatest fall since 2008. The declining value of the rouble since August has shadowed the trajectory of the price of Ural oil, Russia's main export commodity, and reflects uncertainty regarding prospects for the global economy. In addition, capital outflows intensified at the end of 2011, boosted by tensions on the political front during December, which added further downward pressure on the rouble. According to preliminary Central Bank estimates, capital outflows totalled USD 84.2 billion in 2011, which was above government forecasts of USD 80.0 billion and almost tripled the USD 33.6 billion outflows recorded in 2010.
Author: Armando Ciccarelli, Head of Data Solutions