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Russia Props Up Ruble, Oil Producers

The new mechanism will remain in place until the end of September. Vladimir Gerdo / TASS

Russia announced Thursday new measures to prop up the ruble and its oil producers, both of which have been suffering from sinking oil prices and the global panic over the coronavirus.

"The government and the Central Bank will continue to take the necessary actions to ensure financial stability," Prime Minister Mikhail Mishustin said.

He announced that the Central Bank would increase sales of foreign currency reserves, which helps support the value of the ruble, after the Russian currency exceeded the symbolic barrier of 80 rubles per dollar on Wednesday evening, a rate not seen since early 2016 during Russia's last economic crisis.

Mishustin said the Central Bank would also compensate oil producers the difference when the market price for Urals crude falls below $25 per barrel. On Wednesday, it was selling for $24.65 per barrel.

This new mechanism will remain in place until the end of September.

The prime minister on Monday announced that the government would unlock reserves of 300 billion rubles ($3.8 billion at current exchange rates) to help support the economy.

On Thursday he announced a month-long "green corridor" from Friday to allow the import of the most essential goods without paying duty.

He sought to reassure the public that Russia will not run out of food.

"Agriculture is the basis of our security, not just in terms of providing food but also in terms of economic and social security," he said.

"We have enough food."

Mishustin added that from Friday government agencies will be monitoring "all prices in each region, in each chain of stores and pharmaceutical organizations."

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