2012.05.25 15:55:36 UPDATE: Russian Ruble Falls To New Lows

(Adds detail.) By Ira Iosebashvili Of DOW JONES NEWSWIRES MOSCOW (Dow Jones)--The Russian ruble hit a new multi-month low against the dollar Friday, bruised by European sovereign debt worries and weak oil prices. "The ruble was never a currency that could stand on its own two feet--it is always dependent on other factors," said Alexei Borichev, a trader at ING Bank NV in London. "In this case, there isn't much good news coming out of Europe, oil looks weak and traders see little reason to hold their positions." Russia's currency was down nearly 1% against the dollar to RUB32.01 as of 13:09 GMT, it's lowest level since mid-January. Against a basket of dollars and euros, the ruble was off by 0.5% to RUB35.61. The ruble is now off just over 10% from highs set just after President Vladimir Putin's election to a third Kremlin term on March 4. A summit of European Union leaders on Wednesday yielded few answers for how the economic bloc would prepare for the possibility of Greece's exit from the euro and prevent the crisis from endangering other economies. Prices for oil--Russia's chief export--weighed on the ruble as well, hovering just above $106 per barrel for Brent crude, down from around $120 per barrel seen earlier this month. Russia needs an average oil price of $117 per barrel to keep this year's budget in the black, the finance ministry has estimated. "Brent is still more likely to edge toward $100 per barrel than to stage a bounce to $110 per barrel," Chris Weafer, chief strategist at Troika Dialog, wrote in a note to investors. Oil falling into a trading range below $100 per barrel would have a "very serious" effect on the way market players see the ruble, a trader at a state-owned investment bank in Moscow said. "It's kind of a red line for us." Domestic concerns have also weighed on Russia's currency, with investors seeing few signs that the newly unveiled government or presidential administration will undertake tough but necessary reforms to the economy. Putin sent mixed signals Thursday regarding plans to sell off state assets--an important bellwether of reform for investors--by calling on the government to draw up plans to sell stakes in oil and gas giants OAO Rosneft and OAO Gazprom in 2013-2015, but also authorizing another state company to buy shares in energy companies previously earmarked for sale to private buyers. "It sounds like privatization will remain in the agenda, but that the state is not in rush to implement it," said Natalia Orlova, chief economist at Alfa Bank. "I think the market would prefer to have a concrete deadline for the privatization of these assets and without time framework this comment will be taken negatively." -By Ira Iosebashvili, Dow Jones Newswires, 7 495 232 9192; ira.iosebashvili@dowjones.com (END) Dow Jones Newswires May 25, 2012 09:55 ET (13:55 GMT)