Investing.com - The Russian ruble fell to fresh record lows against the dollar on Tuesday, after a steep interest rate hike overnight failed to ease selling pressure on the currency from falling oil prices and western sanctions.
USD/RUB hit fresh highs of 69.20, and was last at 65.05 after initially falling to lows of 58.31 in early trade.
The ruble briefly rallied after Russia’s central bank hiked interest rates to 17% from 10.5% at an emergency meeting overnight. The move came after the currency lost more than 10% of its value on Monday.
The selloff in the ruble came after the U.S. Congress on Friday approved tougher sanctions on Moscow and authorized the supply of military aid to Ukraine.
Fears that a rout in global oil prices would devastate Russia’s energy-dependent economy also pressured the currency lower.
Brent oil fell below $60 dollars a barrel for the first time since May 2009 in afternoon trading in Moscow on Tuesday, dropping to $59.50.
A combination of lower oil prices and western sanctions have weakened the ruble, caused a spike in inflation and almost completely shut Russian companies out of the global financial markets.
Russia’s central bank warned last week that inflation could exceed 10% in the first quarter of 2015.The annual rate of inflation rose to 9.5% in November.
The ruble also hit fresh lows against the euro, with EUR/RUB at 86.35, off the lows of 74.96 struck overnight.