Russia's rouble slumps to record lows as world oil prices fall. But is there worse to come? Grace Pascoe looks at how oil-exposed countries are feeling the pain.
Commodity-dependant Russia is feeling the pain of low oil prices. When its currency slid to an all-time low of 86 roubles per dollar, it was mirroring falling oil prices. But despite recent tumbles, the Kremlin has denied the currency is collapsing. Simon French is from Panmure Gordon. (SOUNDBITE) (English) CHIEF ECONOMIST AT PANMURE GORDON, SIMON FRENCH SAYING: "What you desperately need to see from the Kremlin rather than deny the rouble is in trouble is to be talking about how they are looking to use the revenues they built up, or indeed access capital markets right now to invest in a diversified range of industries that enables the Russia economy to put it on a more secure footing." But the question everyone wants to know - is do oil prices have further to fall? (SOUNDBITE) (English) CHIEF ECONOMIST AT PANMURE GORDON, SIMON FRENCH SAYING: "While it is very difficult to call the bottom in such a market as this, I think we are now getting very very close." Russia's 2016 budget assumes oil will sell for $50 per barrel. But with oil dipping below $30 a barrel recently, government spending power is being impacted. And that could mean some unwelcome changes ahead. Maria Lipman is an independent political analyst. (SOUNDBITE) (English) INDEPENDENT POLITICAL ANALYST, MARIA LIPMAN, SAYING: "The government pledges not to cut down social expenditures, but I don't think it can do this. And already the talk is that taxes will have to go up, this is inevitable. And all kinds of other measures will be taken that will affect people's lives directly. This on top of the reduced incomes and the growing inflation already." Many Russians are already stocking up on dollars. And now the country's deputy finance minister says it will look at introduce hedging to protect the country's oil earnings against further price drops.