The Russian currency is highly vulnerable to twists in the global oil market. Moscow used to announce intentions to unleash the ruble from oil dependence. However, all efforts are doomed to failure as long as the national economy remains reliant entirely on commodity exports. Interestingly, the ruble trades inevitably lower whenever oil prices follow the bear trend. Oddly enough, the ruble does not receive a boost from the uptrend in the oil market. History is repeating itself this time. Oil prices have taken a nosedive as the coronavirus pandemic is reducing global demand for energy. In this context, the ruble slumped to the lowest level in four years. Nevertheless, Russia’s finance minister Anton Siluanov assures the jaded Russians that there are no reasons for panic. Citing the official, even if oil prices tumble to $30 a barrel and get trapped there for nearly four years, the government will be able to fund all budget spending. Apart from the economic aftermath caused by the coronavirus, oil prices suffered the sharpest intraday fall since 1991 after Russia’s withdrawal from OPEC+ pact. Moscow rejected the proposal for deeper oil production cuts. Analysts are puzzled to predict the time when oil buyers will increase purchases to regular volumes. Since early 2020, crude oil has lost 20%, thus pushing the ruble to record lows. Anton Siluanov does not consider the ruble’s weakness critical, so it does not require urgent measures from the central bank.
