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How will the oil collapse affect the Russian ruble exchange rate?

Economy
09.03.2020
59
How will the oil collapse affect the Russian ruble exchange rate?

The oil prices crash to $30 per barrel came out to be a surprise to the initiators of Russia’s withdrawal from the OPEC+ deal. This was stated by Dmitry Marinchenko, director of the group for natural resources and commodities in analytical agency Fitch.

In his opinion, Moscow didn’t take into account this sequence of events. The current cost of raw materials can hardly be considered convenient for Russia, Marinchenko reports. At such a price, the country faces a budget deficit, and subsequently devaluation, which may also push the government to increase taxes for oil companies.

Analysts estimate that the 30% drop in oil prices on March 9 was the most severe one since the 1991 Gulf War.

In the view of unfolding events, the US dollar and euro began to rise in price. Representatives of the Ministry of Finance announced that in order to compensate for the costs that the budget will not receive, the department is going to sell the currency on the market.

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