In afternoon dealing, the currency fell to its lowest level against the dollar since late April 2022, trading at 78.53 rubles. Additionally, the ruble was trading above 85.34 against the euro.
Despite a rise in global oil costs of more than 6% on Monday, the ruble fell. This followed the announcement by the OPEC+ group of oil-producing nations that they would reduce their combined crude production by an additional 1.15 million barrels per day beginning in May and continuing through the end of 2023 in an effort to stabilize the oil markets. This comes after Russia’s unilateral reduction in oil production of 500,000 bpd was extended.
Moscow cut its oil production in retaliation for an oil price cap introduced by the West, which it said would eventually result in scarce supply and trigger uncertainty in the global market.
Among the key factors that have been attributed to the weakening of the ruble are the state budget deficit caused by lower foreign currency revenue inflows from exports, and the ongoing recovery in imports as companies build new supply chains.