Ruble Hits Post-1998 Trough

Russia's ruble tumbled to a record low against the dollar after the Central Bank accelerated the devaluation of the currency in an effort to stem the drain on foreign-exchange reserves.

The currency dropped to as low as 32.41 per dollar, the weakest since Russia redenominated the ruble at the start of 1998. The trading band versus the dollar/euro basket was widened for the fourth time in five days, a Central Bank official said. The ruble has lost 39 percent against the dollar since August.

The country's international reserves declined $11.7 billion from Dec. 26 to Jan. 9 as the Central Bank sold currency to stem the ruble's fall.

The value of the stockpile, the world's third-largest after China's and Japan's, fell to $426 billion from Dec. 26 to Jan. 2, when there were 2 1/2 official trading days.

During the public holiday period from Jan. 2 to Jan. 9, when official trading was suspended, reserves rose to $426.5 billion.

The Central Bank spent an estimated $5.5 billion to support the ruble, said Vladimir Osakovsky, an economist at UniCredit Bank in Moscow.

"This indicates strong capital flight," given it that it occurred in 2 1/2 days of trading, he said. "It shows that banks and other market participants were stockpiling foreign currency prior to the New Year's holidays."