MOSCOW - The Moscow stock exchange dropped by 5% on Friday as Russia's energy-dependent economy reels from low oil prices, while the country's currency hit a new low.
The dollar-denominated RTS index dropped by 5.03%, while Russia's battered ruble stood at 77.73 against the dollar and 84.71 against the euro for the first time since the currency slump of December 2014
The dollar-denominated RTS index was down 5.0% around 6.40pm Thailand time, while Russia's battered ruble stood at 77.73 against the dollar and 84.71 against the euro, a level last seen during the currency slump of December 2014.
"The dramatic variation in oil prices we have witnessed in the last weeks and especially in the last days, creates serious risks for carrying out the budget," Russian news agencies quoted Prime Minister Dmitry Medvedev as saying at a cabinet meeting on Friday.
President Vladimir Putin said last month that Russia had calculated its 2016 budget based an oil price of $50 per barrel, admitting that the figure was now an "optimistic" assessment of the situation.
This week global benchmark crude oil prices fell below US$30.
The Russian leader nonetheless insisted the country would not rush to recalculate its budget.
Earlier this week the government announced fresh spending cuts in an effort to cope with tumbling oil prices.
Medvedev on Friday told his ministers he expected "proposals to reduce spending and shrink the workforce of the government administration."
The objective of the cuts, Medvedev said, was to ensure the state's ability to fulfil its social obligations.
According to the Vedomosti business daily on Friday, the government is set to revise its economic forecast for this year to a contraction of 0.8% instead of the 0.7% growth it had previously expected.
"This adjustment in official expectations is not a surprise, as it follows weak global oil price performance," said Dmitry Dolgin, an analyst at Russia's Alfa Bank. "The key question is what policy actions will be taken following this revision."