Monday, the Russian Ruble tumbled to an 11-day low of 34.2118 against the US dollar by 4:05 am ET as traders weighed the report showing the World Bank downwardly revised Russia's 2009 growth outlook. The ruble, however, edged slightly higher against the greenback thereafter.
The World Bank now expects the Russian economy to contract 4.5% in 2009, down from 3% growth forecast in November 2008. As the crisis continues to spread to the real economy around the world, initial expectations that Russia and other countries will recover fast are no longer likely, the World Bank said in its latest Russian Economic Report.
Russia's inflation is forecast to be around 11% to 13% in 2009 as a result of rising import prices and considerable relaxation in fiscal stance. The deeper and more prolonged economic crisis is likely to have a major social impact, which is already spreading fast. The World Bank estimates that aggregate unemployment in Russia will increase by 2.7 million people in 2009.
After a week long winning streak in mid-March, the ruble paused against the US dollar last week. The ruble that rose to near an 8-week high of 33.1390 versus the greenback on March 24 pared gains thereafter. The ruble has lost around 3.1% since then.
The dollar-ruble pair, which closed last week's trading at 33.738, is currently worth near 34 with 36 seen as the next target level.
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