Amid falling oil prices by 30% European stocks fall significantly in early trading, currencies overcame four-year highs against the Russian ruble.
It is noted that the dollar was 74 rubles per dollar, Euro – 84 rubles per Euro. According to Bloomberg, as of 11:25 the dollar reached the mark 74,02 ruble to the dollar (this is the maximum since the end of February 2016), the Euro exceeded the level 84 rubles per Euro (also updating the 4-year high).
Due to the fall of the ruble, the Bank of Russia has stopped the purchase of foreign currency for 30 days. The Central Bank said it will monitor the market situation and stands ready to use additional tools to maintain financial stability.
The Ministry of Finance of the Russian Federation stated that at an oil price of 25-30 dollars of funds of the national welfare Fund will last for 6-10 years.
According to Bloomberg, the Russian ruble became the leader of decline among emerging market currencies lost against the dollar more than 7%. About 4% lost in the price Rand of South Africa and the Malaysian ringitt. Other currencies of developing countries fell within 1%.
It is emphasized that, on 9 March, European stocks falls by 3-10%, in particular, as of 11:00 (CET) Netherlands AEX fell to 6.85 percent at the end of the previous trading session, the Swiss SMI – at 3.8%, British FTSE 100 – by 8.67%, and German DAX – by 7.41%.
It is also reported that against the background of falling oil prices dropped the value of the shares of Russian companies on the London stock exchange. In particular, as of 10:45 (Kiev time) of securities of the savings Bank fell by 26.3%, “LUKOIL” – 24,4%, VTB – on 18,5%, “Rosneft” – on 22,5%, “Gazprom” – on 18%.
According to the analyst of rating Agency Fitch Dmitry marinchenko, the fall in oil prices to $ 30 Russia faces budget deficit and devaluation.
Oil prices in Asian markets have fallen more than 31% in early trading on Monday, March 9, on the background of the fact that OPEC countries are unable to negotiate with other oil producers to reduce output.
OPEC countries at the talks on March 6, are unable to negotiate and renew the agreement to reduce oil production. The current transaction will cease to operate from 1 April. After that, all restrictions on oil production in the OPEC countries and “non-OPEC” will be removed.
The build-up of oil production by Russia will depend on the plans of oil companies. The stumbling block in the negotiations was the position of Moscow, which refused to deepen limitations. Without the participation of Russia and OPEC don’t see the point to continue to artificially limit production.
State company Saudi Aramco has offered to buyers of oil, the highest discount for the last 20 years and promises to increase production by more than 2 million barrels a day.
Press Secretary of “Rosneft” Mikhail Leontyev said that the agreement with the Organization of countries-exporters of oil to reduce oil production did not meet the interests of the Russian Federation.