No breather for Putin—or ruble—as Russia's economy slumps

The Russian ruble tumbled on Monday, building on 2014's record decline, after new figures showed the country's economy shrunk in November for the first time in over five years.

The U.S dollar rose as high as 58.91 against the ruble on Monday—a more than a 9.5 percent change—after the Russian economy ministry said that the country's gross domestic product (GDP) fell by 0.5 percent last month. This was the first drop since September 2009, according to Reuters, and comes after the Russian government forecast that GDP could decline by as much as 4 percent next year.

Russia's manufacturing sector also shrank for the first time in six months in December, according to the HSBC purchasing managers' index out Monday.

People walk past boards showing currency exchange rates in Moscow, December 17, 2014.
Maxim Zmeyev | Reuters
People walk past boards showing currency exchange rates in Moscow, December 17, 2014.

The renewed ruble turmoil came after a few days of stabilization that saw Moscow attempt to reassure markets the worst was over. Finance Minister Anton Siluanov said that liquidity fears had receded and the currency had found its equilibrium, the U.K.'s Financial Times newspaper reported on Christmas Day.

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The ruble has declined around 70 percent since the start of the year, taking a hit on the military incursions in Ukraine and the subsequent imposition of international economic sanctions on Russia.

Investor concerns have also focused on the country's slowing domestic economy and the potential hit from the dramatic slump in international oil prices.

Boris Schlossberg, managing director of currency strategy at BK Asset Management, told CNBC that Russia's fortunes were heavily tied to the price of oil next year.

"If you have oil staying at $50 for a year it's really going to create a tremendous amount of pressure over there," he said.

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Nick Hungerford, the director and CEO of investment firm Nutmeg, said he was avoiding assets with exposure to Russia, both in his personal and professional investment portfolio, because of the "confused" political situation.

"We're not touching them; I don't think many people are," he told CNBC Monday. "Simply, you don't know what's going to happen."

—CNBC's Everett Rosenfeld contributed tot his report.