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, Censor.NET reports citing Bloomberg.
The currency would need to tumble more than 20 percent 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 verbal and market interventions, an emergency interest-rate increase and capital controls, they said.
"It would take more than 90 rubles per dollar to provoke significant repercussions," said Sergey Narkevich, an analyst at Promsvyazbank PJSC in Moscow. "In 2015, Russian monetary authorities managed to mostly avoid spillovers from the foreign-currency market and keep the financial system afloat and broadly functional."
Based on historical data, Societe Generale SA estimates that a 10 percent 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 economy will contract 0.5 percent in 2016 from a year before, according to the median estimate of 39 economists in a separate survey, which is down form zero growth expected by the respondents last month. A renewed sell-off in oil in recent weeks pushed banks including JPMorgan Chase & Co. to worsen their forecast for the Russian economy.
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