Censor.NET reports citing Bloomberg.
The ruble weakened 8 percent in August as Brent crude, the grade used to price Russia's main export blend, fell 7.4 percent. That retreat pushed the currency's 30-day correlation with oil to 0.82 by 1:06 p.m. in Moscow, the highest according to Moscow Exchange data for the currency going back to 2003. A reading of one would mean they're in lockstep. The ruble dropped 2.4 percent on Monday to 67 per dollar.
Since abandoning a managed currency regime last November, the world's largest energy exporter has allowed the ruble to the trade more or less freely. The main benefit for Russia is that the weaker currency helps offset declining sales from the oil and gas industries, which account for about 50 percent of state revenue and are denominated in dollars. That's softening the blow from the slump in oil that is otherwise exacerbating the recession and budget deficit.
The currency will probably remain tightly correlated to oil, which is "now the main driver," said Dmitry Polevoy, the chief economist for Russia at ING Groep NV in Moscow who projects that the ruble will struggle to advance in September due to risks related to the Federal Reserve rate decision and China.
Brent crude slumped 2.7 percent to $48.68 a barrel on Monday, capping the fourth month of losses, as U.S. drillers showed no signs of letting up even as a supply glut persists.
The outlook for oil weighed on all Russian assets, as local-currency bonds lost 9.6 percent this month, the most after Malaysia on the Bloomberg Emerging Market Local Sovereign Index. The dollar-denominated RTS Index of stocks retreated 5.8 percent in August after falling into a bear market in July.
In a move that suggested Russian policy makers were getting uncomfortable with the pace of the ruble's slide, the central bank stopped daily purchases of foreign exchange last month after introducing them in mid-May as the ruble strengthened to a 2015 high.
The price of Brent crude in ruble terms climbed to 3,255 a barrel in August, about four percent below its average for the past five years. Russia is set to post a fiscal deficit of 3.3 percent of gross domestic product in 2015, according to the median of 31 forecasts compiled by Bloomberg.
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