Reuters: Russia’s rouble will continue to decline in 2016, German Gref, the head of top lender Sberbank said on Friday, signalling further risks for the oil-dependent economy.
The rouble has lost 52% against the dollar since mid-2014 due to weaker oil prices, which hit an 11-year low this week, and Western sanctions over Moscow’s role in the Ukraine crisis which have limited external financing.
“The key trends point to further (rouble) decline,” Gref said in an interview with Rossiya 24 television. “From the monetary point of view, the oil price should be falling... and the rouble weakening.”
Benchmark Brent crude has fallen by two thirds to about $38 per barrel since mid-2014 when it started to decline, pressured by a supply glut.
Next year, the glut is expected to be smaller as global demand rises and the price collapse deters output in some countries outside the Organization of the Petroleum Exporting Countries (OPEC).
However, there is no sign yet that OPEC itself is prepared to lower its supply - which is likely to rise when sanctions on Iran are lifted.
Oil prices lower than $40 per barrel present an extra challenge to Russia’s banking sector, where a number of players have already received state support, Gref, former Economy Minister, said earlier this month.