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18 Mar, 2020 23:39

As markets panic, Russian Ruble is WORLD’S WORST performing currency in 2020

As markets panic, Russian Ruble is WORLD’S WORST performing currency in 2020

The great ruble oscillation has returned with a vengeance. Russia's currency seems attracted to extremes, lurching from hero to zero, depending on how the winds are blowing.

At various stages since 2015, it has been the world's best-performing currency, before tapering off again. Now, as markets plummet worldwide amid coronavirus and oil shock panic, wouldn't you know it? The ruble is plumbing the depths.

It's presently the worst-performing currency in the world in 2020, against the benchmark US dollar. That’s according to the Forex market, which records that as of Wednesday evening, the ruble has fallen by 28.59 percent since the beginning of the year.

Also on rt.com 10,000-point wipeout: Markets continue to plunge as coronavirus fears rattle investors

As the Euro reached a mark of 88 rubles, the US dollar struck a new post-February 2016 high, rising above the 80 dollar mark to 81.

Numbers late on Wednesday show the next worst-performing currencies behind the ruble as Brazilian real, which has lost 28.21 percent, followed by the Mexican peso at 26.91 percent.

Russia's currency has taken the tumble due to two main events – the coronavirus outbreak and the sharp drop in oil prices, caused by the breakdown of the OPEC+ deal between Moscow and the Saudi Arabia-led bloc.

Also on rt.com Oil price drops to lowest level since 2003 as demand for energy weakens due to slowing global economy

Speaking to Moskovsky Komsomolets, economist Eugene Gontmacher highlighted that the ruble had actually strengthened against the dollar at the end of 2019, and subsequently, “it seemed to our authorities that the economy is no longer so dependent on energy exports.”

Gontmacher argues that the recent movements of the ruble have proven that this is far from the case and that the Russian economy clearly “did not overcome the dependence” on oil. Brent crude, which started the year at 66 dollars per barrel, now sits below $30. 

While the Russian response is as yet unknown, a Bloomberg survey of 35 economists showed that all but one expect Russian Bank Governor Elvira Nabiullina not to cut rates, bucking the international trend of developed countries, which have mainly come forward with rate cuts as an emergency measure.

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