Russian ruble falls again, now at 61.25 to the dollar

MOSCOW, Dec. 15 (UPI) -- The Russian ruble traded at more than 60 to the dollar for the first time Monday, weakening by nearly five percent as it sold for 61.25 in Moscow's late trading.

An increase in the cost of Brent crude oil, the oil industry benchmark, from $60.55 per barrel to over $63 per barrel, did not impact the ruble's decline. The Bank of Russia sold $350 million in foreign reserves to help prop up the ruble, BCS Financial Services announced late Monday.

The decline in the price of oil, the commodity which comprises much of Russia's exports and which has fallen by 43 percent in 2014, has removed 18 percent of the ruble's value in December alone. The drop in the price of oil, and economic sanctions by the European Union and the United States, in the wake of the Ukraine conflict, have weakened confidence in Russian assets.

"To a large extent it's a foreign outflow, triggered by a reconsideration of Russia's long-term prospects," Dmitry Dudkin of Moscow's Uralsib Financial Corp. told Business Week. "People start pricing a long period of low oil prices. And in these circumstances Russia doesn't look like a place where one should invest money, even without sanctions."

Russia is bracing for a recession, as the government announced it expects the economy to contract by 0.8 percent in 2015. Its inflation rate reached nine percent in November.