Devaluing Ruble Hits New Low

The ruble fell below the weakest level seen during the 1998 crisis after the Central Bank devalued the currency on Monday for the sixth time in seven days to protect reserves.

The ruble depreciated to 33.17 per dollar, the lowest since early 1998, before the government's default on $40 billion of debt helped trigger a financial market collapse. The ruble has lost 7.7 percent of its value since official trading resumed this year, extending the decline to 29 percent since August 2008.

The Central Bank, which manages the ruble against a basket of about 55 percent dollars and the rest euros, widened its target range on Monday, a bank official said. The currency has fallen 29 percent versus the basket since Aug. 1 and is now able to decline about 22 percent from a target rate, from about 3.6 percent on Nov. 11, the start of the current round of depreciation.

Mark Mobius, who manages more than $24 billion in emerging-market assets as executive chairman at Templeton Asset Management, said he expects the ruble to begin to stabilize and that the Central Bank may slow devaluations as the ruble approaches fair value. He did not say what level that would be.

"It's not as overvalued as it was," Mobius said. "I know some commentators think further devaluations can be expected, but I'm not too sure about that."