Russian ruble’s collapse

This item appears on page 62 of the February 2015 issue.

On Dec. 14, a combination of international sanctions and low oil prices caused the value of the Russian ruble to fall from about 50 rubles to the US dollar to, at its lowest exchange rate, a bit more than 64 rubles to the dollar, a record low. The ruble bounced back the next day to less than 60 per dollar.

Overall, since the start of 2014, the ruble has lost 45% of its value. 

In November, in an effort to stabilize its value and stave off stagflation, Russia’s central bank raised interest rates and removed the ruble’s value links to the dollar and the euro in foreign currency markets.

Despite the ruble’s gaining back some value against the dollar, Russia’s gross domestic product dropped 0.5% in November alone, with estimates of further shrinking in 2015. On Dec. 22, the Russian central bank lent Trust Bank RUB30 billion to prevent bankruptcy, the country’s first bank bailout of the current financial crisis.