The Russian ruble weakened to nearly 70 rubles per dollar today, compared to 64 rubles just a month earlier, as crude oil prices slid to below $40 per barrel. The ruble’s fall comes after Russia approved its final budget for 2016 on Dec. 4 with an assumed average oil price of $50 per barrel for the year. While a weaker ruble will increase profits for Russian energy companies that sell supplies in dollars, lower oil prices and a weaker currency do present a significant challenge for both the Russian government and Russian consumers.
In a speech on Dec. 3, Russian President Vladimir Putin declared that Russia’s economic situation is “difficult” but not “critical.” Nevertheless, the government’s actions indicate that the Kremlin is concerned about the public’s reaction to growing economic troubles. For example, following the downing of a Russian military jet that flew over Turkish airspace, Russia announced that it will ban some Turkish imports. However, implementation of the
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