Russian ruble drops sharply amid weak oil prices

Russia's ruble has got off to a bad start in 2015 after the currency fell sharply against the US dollar and euro on 5 January.

The Russian currency tumbled by 4% in the early trading session, reaching 58.51 rubles. Meanwhile, the ruble hit 70.29 against the euro at the same time, which marks a 2.4% drop in the FX rate.

Elsewhere, the drag on oil prices is said to have had a knock-on effect on the ruble.

The Brent futures and WTI contracts have plummeted over the last few months. These had regained some ground, but fell again on 5 January to hit 2009 lows of under $60 per barrel (bbl).

In stark contrast to current figures, back in 2013 and 2012 oil prices averaged $100/bbl.

The US WTI contract tumbled by over a $1 to reach $51.40/bbl at its lowest point so far today.

At the same time, the February Brent contract fell as low as $55.36/bbl.

The Russian ruble has lost around 40% of its value since the summer, as falling oil prices have battered the country's export revenues.

The country has already tried to stabilise the currency by hiking interest rates to 17%; this has so far failed to have the desired effect.

Russian Prime Minister Dmitry Medvedev is also forcing exporters to sell chunks of their foreign currency revenues in a bid to help stabilise the ailing currency.

The Russian government has warned the economy is facing recession in 2015, predicting earlier this month it would contract by 0.8%.

Meanwhile, the Russian stock markets also tumbled, amid the weak currency. The RTS index fell by over 4.5% to 754.6 points in early trading.