Following the announcement by Russia’s central bank that interest rates are to be cut for a fifth time, the Russian rouble has weakened to 38 versus a euro-dollar basket. This is the lowest point the rouble has fallen to in the last three weeks.

Vladimir Osakovsky, analyst at Unicredit, acknowledged that the fall in the Russian rouble’s value was bad news, but emphasized it was not a long-term concern: “It is a negative development for the rouble in the short term, however we continue to see oil prices as the key driver for the exchange rate,” he said.

This view was backed up by dealers, who said that falling oil prices had already prefaced rouble depreciation before the interest rate cut announcement.

According to Reuters data, the Russian rouble weakened as far as 38.01 versus the basket, down 1.4% on the day.

A recent report from Russia's Federal State Statistics Service shows that Russia’s GDP dropped 10.9% year-on-year in the second quarter, compared to a 9.8% fall in the first quarter. Sequentially, GDP increased 7.5% in the second quarter.