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. Last Updated: 07/27/2016

Ruble Hits a New Low Of 368 to the Dollar

The ruble fell to an all-time low in trading Tuesday, sinking to 368 rubles to the dollar at the Moscow Interbank Currency Exchange on a volume of $46. 69 million.


The 30-ruble drop -- from a rate of 338 rubles to the dollar established just - five days earlier -- fueled inflationary expectations for the troubled currency as Russia begins another winter mired in debt and economic stagnation.


Analysts quoted by Tass in the wake of trading speculated that the currency's drop was linked to the continued decline of Russia's industrial output, saying that it confirmed the strength of inflationary pressures caused by the Central Bank's weak monetary policy.


Earlier, a spokesman for acting Prime Minister Yegor Gaidar had been quoted as saying that the Central Bank had printed more rubles in July and August -- 640 billion -- than the former Soviet Union issued in the 30 years between 1961 and 1991.


At the Moscow exchange, the deputy general manager, Alexei Osemnuk, also blamed part of the ruble's downward trend on the sheer volume of currency entering circulation.


He said that while the currency market could be affected by ambiguous political signals from the government and the country's competing politicians, one aspect of the equation remained certain.


"One of the factors you can always evaluate with mathematical precision is the output of rubles", he said.


"Because of inflation, there has been a steady flight away from the ruble since the beginning of the year", he said. "Lately, though, this flight has been gathering strength, and it is hard to say where it will stop".


But in the end, he said, the Russian market for dollars was largely a reflection of people's increasing demands for hard currency at a time of financial instability.