Russian ruble dips to decade low

Russia's ruble fell to its lowest point in more than a decade against the dollar on Thursday as the Central Bank continued a policy of controlled devaluation.

The ruble lost 1.4 percent against a dollar-euro basket in early afternoon trading on the MICEX currency exchange. The currency's value is normally kept within in a range against this basket of currencies by the central bank to avoid large fluctuations.

The ruble dropped 0.6 rubles against the dollar, to 32.2 _ its lowest since December 1997, just before the government redenominated the national currency. The ruble fell 0.4 rubles against the euro, to 42.2.

The decreases marked the 16th devaluation of the ruble since Nov. 11, when the government launched a controlled slide that has seriously depleted its currency reserves. It is also a fourth drop since Russia's long New Year's and Orthodox Christmas holiday ended Sunday.

The ruble has been badly bruised by declining energy prices and growing economic difficulties. It has shed more than 27 percent of its value against the dollar since its high of 23.4 in early August.

Eager to avoid angering the public, Russia's government has spent tens of millions of dollars to slow the fall of the ruble, which has ordinary Russians worried after years of economic expansion. Russia's international reserves dropped 11 percent this year, to $427 billion, and down $29 billion in December, the Central Bank said Thursday.

Analysts say the ruble is hurt by expectations that the price of oil _ which fuels the economy _ has not reached a bottom and will continue to fall.

Vladimir Tikhomirov, chief economist at the Moscow-based investment bank Uralsib, said the ruble is already reasonably priced against other currencies.

But the Central Bank apparently wants to gradually let the ruble fall to a low beneath which it will not drop under any circumstances, economists said.

``If oil reaches $50 and stays at this level, this will improve the attitude to the ruble _ both domestically and from foreign investors,'' Tikhomirov said. ``Then the ruble will climb fast _ if the fundamentals are good.''

Observers expect the string of near-daily devaluations to stop soon, probably within a month but possibly much earlier.