Russian Ruble Extends Decline To 4-1/2-month Low Vs U.S. Dollar After Rate Cut

The Russian Ruble extended its decline against the U.S. dollar in European deals on Friday, after Russia's central bank cut its key interest rate for the fifth time this year, citing the prospect of significant cooling in the economy despite a moderate increase in inflation risks.

The Bank of Russia Board of Directors decided to reduce the key rate to 11.00 percent from 11.50 percent. The decision was in line with economists' expectations. On June 15, the bank cut its key rate by 100 points.

The currency has trading weak in early deals, as oil prices collapsed after OPEC Secretary-General Abdullah El-Badri signaled that it would not cut production despite the fall in crude prices over recent months and the prospects of greater supply of oil into the market.

The Russian currency fell to 61.15 against the greenback, a level not seen since March 19. Continuation of the ruble's downtrend may lead it to a support around the 62.6 mark. The pair was worth 59.51 when it closed yesterday's trading.