The Russian ruble hit another record low against the US dollar for the second successive day on January 21, falling to an intraday price of 85 to the greenback, after hitting 82 to the dollar the day before.
The slump, fuelled by March futures for Brent crude dropping to $27.90 per barrel on January 20, marks another dark day for Eastern European and Central Asian currencies, after more than a year of turbulence in the energy and commodity markets continues to hammer currencies across the region.
Net energy exporting Russia and Azerbaijan have suffered in particular, with both countries being forced to let their currencies float, following futile attempt to intervene, which led to heavy losses of reserves. The Central Bank of Azerbaijan's (CBA) attempts to prop up the manat led to $8bn of reserves - more than 10% of the country’s GDP - being frittered away in 2015, before the decision was made to float.
The recent announcement by Azerbaijani President Ilam Aliyev that controls - in the form of a 20% tax - will be imposed in order to prevent foreign capital flight shows that other methods are now being sought to stem the depreciation.
While Elvira Nabiullina, head of the Central Bank of Russia (CBR), maintains that the current rate is close to fundamentally fair, Russian presidential adviser Sergei Glazyev advocates halting the ruble's decline by dipping back into reserves, arguing "that is what they’re built for".