Rouble's Stumble: Russian Currency Hits Record Low Against Dollar

The Russian rouble fell beyond 110 to the U.S. dollar, sparking concerns of economic instability. Analysts predict further decline, prompting calls for governmental intervention. Sanctions and market volatility exacerbate the situation, affecting inflation and trade, though benefiting export revenues.

The Russian rouble weakened significantly, surpassing 110 against the U.S. dollar on Wednesday, a threshold that may push authorities to act in support of the currency. Since early August, the rouble has dropped more than 24%, confounding economists' expectations for a slower decline.

The unexpected plummet has been intensified by over a 20% drop in the stock market this year, as investors move their funds to higher interest-earning deposits. This environment of uncertainty parallels calls from analysts predicting the rouble may reach 115-120 by year's end without intervention.

Compounding concerns, the rouble's descent has heightened inflation pressures, challenging the central bank's monetary policies. Sanctions on Russia's financial sector have only worsened trade volatility, although the weakened rouble benefits state revenues from energy exports.

(With inputs from agencies.)