German group warns against plunge in Russian ruble’s value

A German business group has warned that the recent drop in the Russian currency, ruble, to a new low will negatively affect Germany’s exports to Russia.

The German Committee on Eastern European Economic Relations said on Wednesday that ruble’s plunge would lead to a 20-percent fall in the Western European country’s exports to the Russian Federation.

“A destabilization of Russia in the end isn’t in anyone’s interest, we would all be affected,” said Eckhard Cordes, the industry group’s head.

Cordes further predicted that Germany will even experience a larger decrease in its exports to Russia than the predicted 20 percent “if the current situation continues.”

The remarks come as the German Chamber of Industry and Commerce has issued a warning to its members, saying that the prospect of the trade and investment in Russia is getting cloudy.

The chamber has also cautioned that its members would be hit by the “dramatic drop in purchasing power” of Russians.

The Russian currency fell to a new low of 67 rubles per US dollar on Monday, but then sprung back to 60 at the end of the day, amid plummeting oil prices and Western sanctions on Moscow over the issue of Ukraine.

In an attempt to stabilize the falling currency, Russia’s central bank has increased, for the sixth time this year, the key interest rate to 17 percent from 10.5.

Since the beginning of the year, the ruble has lost over 45 percent of its value in contrast to the US dollar.

Washington and the European Union accuse Russia of destabilizing Ukraine and have slapped a number of sanctions against Russian and pro-Russia figures. Moscow rejects the allegation.