Russia's Ruble Hits New Historic Maximum As Oil Prices Add Pressure

The Central Bank of Russia has set the official rate of the ruble to the euro at 85.622 RUB/EUR from January 19.

It is higher by 2.3269 rubles from the current day's level, having dipped to an all-time low, Russian news agency RBC reported.

Until now, the highest official rate of the euro was set by Russia's Central Bank at 84.589 rubles on December 18, 2014, the agency reported.

The official rate of the dollar rose Monday by 2.1 rubles. The Central Bank has set the official dollar exchange rate at 78.6678 rubles from January 19. The official exchange rate of the dollar has never risen above 78 RUB/USD after the redenomination in 1998.

The dollar rose to 78.936 rubles in early trading on the Moscow Stock Exchange on Monday. At the same time, the euro increased to 85.93 rubles.

The ruble weakens due to falling oil prices. Thus, the price of Brent futures contract with March delivery on ICE in London fell below $28.

"The drop in oil prices pushes the ruble to new record lows. The negative impact on the [currency] market emanates from oil. Currency sales by exporters, which were slightly higher last week, have only partially compensated for the weakening of the ruble," analyst at Nordea Bank, Denis Davydov, said.

Head of FI and Investment Services Department of Ural Bank for Reconstruction and Development, Vladimir Zotov, expects that the exchange rate may fall this week to as low as 80 rubles per dollar.

"Oil quotations in the medium term may fall to $20 per barrel, unless there are some actions and statements on the part of the oil cartel, or the geopolitics interfere in the process. Accordingly, the ruble will continue to weaken against the dollar and euro," Zotov said.

By 13:05 February futures for Brent dropped to $29.09 per barrel on the ICE exchange, and the dollar was traded at 78.671 rubles on the Moscow Stock Exchange, while euro was at 85.695 rubles.