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. Last Updated: 07/27/2016

Ruble Hits April Low on Falling Oil

The ruble slid to its weakest level this month against the dollar after oil fell to a five-week low and reports on unemployment and retail sales boosted concern that the economy is slowing.

The currency tumbled as much as 0.9 percent to 34.22 per dollar on Tuesday, the weakest since March 30. Crude in New York declined as much as 4.5 percent to $43.83 a barrel on Tuesday, the lowest price since March 16.

"The end of the rally seems to have come both in oil prices and in global sentiment, which blunts demand for the ruble," said Gaelle Blanchard, an emerging-markets analyst in London at Societe Generale. "It's going to be painful for Russian companies and households for a little while."

The ruble was down by 0.8 percent to 38.70 versus the dollar/euro basket, which is used to limit currency swings that disadvantage Russian exporters. This is the currency's weakest close since April 1 against the basket, which is made up of about 55 percent dollars and the rest euros.

The currency will probably slide back to the 41 threshold by the end of June and then exceed that boundary by the end of the year, Blanchard said. Societe Generale sees the ruble at 43 versus the basket by the end of the year, more than 10 percent weaker than Tuesday's levels.

The Central Bank may be forced to allow a "somewhat weaker ruble" as signs of an economic slowdown prompt it to cut interest rates, reducing the appeal of ruble-denominated assets, Rory MacFarquhar, an economist at Goldman Sachs, wrote in an e-mail to clients late Monday.