REUTERS
The ruble has room to weaken further, even beyond the record-low it set against the dollar a year ago, without inflicting terminal damage on the Russian economy, according to a survey of analysts, Bloomberg reported.
The currency would need to tumble more than 20% to at least 90 against the dollar to tip the country into a full-blown crisis, according to 17 of 20 respondents in a Bloomberg survey.
Should such a threat emerge, the Bank of Russia has an array of tools at its disposal, including market interventions, an emergency interest-rate increase and capital controls, they said.
It is reported that Societe Generale SA estimates that a 10% ruble depreciation adds about 50 basis points to a full percentage point to annual inflation in Russia. Bank of Russia Governor Elvira Nabiullina said this month that the ruble’s impact on price growth is easing.
The ruble, which fell to an all-time low of 80.10 against the dollar last December, has weakened almost 6% this month, the second-worst performer among 24 emerging-market currencies tracked by Bloomberg after the Argentine peso, according to the report.