Currency Weakness
The ruble has lost more than 7 percent against the dollar this year, the worst performer among 24 emerging-market currencies tracked by Bloomberg. Oil has fallen about 15 percent in 2016 as volatility in global markets adds to concern over swollen U.S. stockpiles and the prospect of increased Iranian exports.
Bank of Russia Governor Elvira Nabiullina has said the regulator is “vigilantly” monitoring the situation and is ready to step in. The central bank hasn’t sold foreign currency since late 2014 after shifting to a free float of the ruble. Officials have warned that Russia must cut spending to avoid running down the reserves it built up when oil prices were higher.
Russian consumers are suffering amid the recession, with retail sales diving 15.3 percent from a year earlier in December, matching the median forecast in a survey of economists. Wages adjusted for inflation plummeted 10 percent, more than analysts predicted, while disposable incomes fell 0.7 percent, less than the 5.6 percent decline seen by economists.