Ruble Falls Near All-Time Low, Past key 80 level against dollar

The ruble fell close to a historic low on Wednesday, as the dollar climbed past the psychological threshold of 80 rubles for the first time since the shock plunge of the Russian currency in December 2014.

After a day of relative calm, the ruble continued on a downward spiral, falling to 80.01 against the dollar, just eight kopecks away from the historic low of December 2014, as oil prices, key to Russia's economy, were testing 12-year lows.

The ruble also fell against the euro, to 87.67 rubles per euro, also its lowest level since December 2014, as Asian and European markets suffered another rout.

"The market will be generally driven by global economic sentiment, which does not exactly look hopeful at the moment," Alfa Bank said in a note to clients on Wednesday.

In December 2014, the Russian currency crashed to unprecedented lows, trading at over 80 rubles to the dollar and 100 to the euro.

Western sanctions over the Kremlin's support for the separatist insurgency in Ukraine have all but closed access to foreign borrowing for Russia and exacerbated the crisis.

The worsening economic outlook amid falling oil prices present a serious challenge for President Vladimir Putin, whose pact with voters has been based on years of economic stability and relative prosperity.

The International Monetary Fund warned on Tuesday that slower Chinese growth, a stronger US dollar, collapsed oil prices and political turmoil could all wreak further havoc in struggling economies like Russia. 

Prime Minister Dmitry Medvedev has said that while the government will seek to honour its social obligations, it will have to "considerably cut" spending.