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Russian Ruble Falls as Oil Prices Tumble Further

People walk past a display with currency exchange rates in central of Moscow, Russia, Dec. 1, 2014.

The ruble hit its steepest one-day fall since the Russian financial crisis of 1998, at one point falling as much as 9 percent before closing the day down 5 percent on Monday as oil prices slid below $70 a barrel.

Battered by low oil prices and the conflict in eastern Ukraine, the ruble has been declining throughout the year, losing about 42 percent of this value since January.

The Russian currency fell for a third day in a row Monday, to 52.45 against the dollar and 65.39 against the euro, hitting fresh record lows.

The currency lost 15 percent against the dollar last week.

The price of oil, the backbone of the Russian economy, has dropped roughly 25 percent since the summer. Brent crude, an international benchmark, fell 3 percent on Friday and was down another 1 percent on Monday to $69.47 a barrel, following a decision by OPEC last week to leave its output target unchanged.

OPEC's shock decision means markets are increasingly pricing in the likelihood of cheap oil for an extended period, causing a fundamental reassessment of Russian asset prices, analysts said.

Oil and gas account for about two-thirds of Russia's exports and half of federal budget revenues, making its economy and asset prices heavily dependent on global energy prices.

”In the short term, the Russian market is a victim of OPEC's apparent decision to reduce the volume of high-cost production through lower prices,” Moscow-based investment bank Sberbank CIB said in a morning note. “The market and the ruble will not stabilize until oil does.”

Russian monetary officials sought to assuage fears of a ruble free fall.

Ksenia Yudayeva, deputy chairman of the Russian Central Bank, told Russian news agencies on Monday there is enough currency liquidity in the market and that the Central Bank has prepared new economic forecasts based on a price of $60 per barrel.

Some material for this report came from Reuters, AP and AFP.