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Russia’s Savior From Oil’s Drop Is Now Snuffing Out Recovery

  • Stronger ruble hampers economic rebound as recession persists
  • Government says growth will resume next year as oil stabilizes
A red dawn illuminates cracking towers at the Lukoil-Nizhegorodnefteorgsintez oil refinery, operated by OAO Lukoil, in Nizhny Novgorod, Russia, on Thursday, Dec. 4, 2014.
Photographer: Andrey Rudakov/Bloomberg
Updated on

Russia is finding the flip side of a flexible currency less and less appealing.

A free-floating ruble, its antidote to the crash in oil prices, is now working against an economy mired in the second year of recession. As crude soared by more than a third in March and April, sending the Russian currency up more than 16 percent against the dollar, gross domestic product resumed a decline after zero growth in February, according to estimates by the Economy Ministry. It did no better in May, when output shrank another 0.8 percent.