The ruble declined further on Tuesday as global oil prices hovered close to five-year lows, with mounting expectations the Russian Central Bank will raise interest rates on Thursday.
At 7 p.m. in Moscow, the ruble was 0.9 percent weaker against the dollar at 54.24 and had lost 1.8 percent to stand at 67.41 versus the euro.
Global oil benchmark Brent fell to a five-year low of $65.29 earlier on Tuesday, extending Monday's steep decline. It saw a modest recovery to $66.54 in the afternoon, but this did little to help the ruble.
The Russian Central Bank said Tuesday that it had spent $1.93 billion in currency market interventions last Friday, bringing last week's total to $4.53 billion, despite its decision to float the ruble a month ago.
"The Central Bank simply is not doing enough to convince the market that it is serious, using a pea-shooter in terms of current piecemeal intervention," said Standard Bank analyst Tim Ash in a note. "It will need to hike rates significantly to defend the ruble, or let the ruble further weaken."
The Central Bank board is meeting on Thursday to consider interest rate policy. A trader at a large Russian bank said that the ruble could now stabilize close to present levels.
"It seems to me that driving the dollar higher [against the ruble] is senseless — the Central Bank could strike and corporates have clearly bought enough forex at the moment," he said.
He added, however: "There aren't people mad enough to bet on the ruble strengthening. … There aren't hopes for an improvement in the economic situation or the abolition of sanctions and these aren't expected, nor is a significant rebound in the oil price."
Western sanctions imposed over Russia's actions in Ukraine are a major factor behind the financial turmoil. Investors are pessimistic that they will be lifted soon, despite new attempts to stop fighting between Ukrainian government forces and pro-Russian rebels in eastern Ukraine.
Russian stocks fell heavily in early trading in response to the low oil price, but later trimmed losses following the modest oil price rebound.
At 6:50 p.m., the dollar-based RTS Index was down 1.48 percent to 858 points, having earlier set a new five-year low of 847. The ruble-based MICEX Index was down 0.41 percent to 1,475 points.
"If earlier investors looked for defense of their savings from devaluation by buying shares, now we're seeing the effect of a capital outflow from securities," Veles Capital analyst Alexander Kosyukov said in a note.
"Such a 'flight' shows the extremely negative mood of investors, as a result of which we could see the RTS Index falling to 800 points in the next week or two,” he said.