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Russian bank tests economy at lowered oil price

Nation's currency remains hobbled in weakened energy market.

By Daniel J. Graeber

MOSCOW, Jan. 15 (UPI) -- Oil priced at $40 per barrel is the benchmark against which the Russian economy is weighed in a new forecast, a Russian central bank official said.

The Bank of Russia revised its worst-case scenario from oil priced below the $60 per barrel mark. A revised stress test puts oil at a further discount.

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"The $40-per-barrel [scenario] is among likely scenarios that we are looking at," First Deputy Chair Xenia Yuadaeva said Wednesday.

Russia's economy is strained by dual pressures from Western sanctions imposed after the annexation of the Crimean Peninsula and the low price of oil, down more than $50 per barrel from June 2014.

The Russian currency continues to trade at historic lows, valued at 64 per U.S. dollar in current trading.

The Russian bank in November assessed the health of the economy with the assumption that oil prices would not fall much below the $80 per barrel mark through 2017. Analysis this week from the United States sees Brent crude oil prices recover to $58 per barrel this year and move toward $75 per barrel by 2016.

Analysis from the World Bank in December finds the Russian economy will face difficulties through 2016 because of the decline in global oil prices. Using an average price of $78 per barrel for 2015, about 40 percent higher than the current price, the bank finds real gross domestic product should contract by 0.7 percent for Russia.

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Russian Prime Minister Dmitry Medvedev this week called all government hands to the deck to help the economy regain momentum, describing the current situation as "quite problematic."

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