The Russian ruble will continue to drop as falling oil prices weaken the country's financial position, the World Bank said in a survey published Tuesday.
Zeljko Bogetic, the bank's lead economist for Russia, closely linked the ruble to the price of crude oil - a key factor in keeping the country's balance of payments healthy.
A weaker ruble "isn't a question of if, it's a question of how it will happen," Bogetic said.
He also said the Russian central bank is likely to continue supporting the ruble by dipping into its gold and foreign currency reserves.
The central bank's reserves stood at $475.4 billion Nov. 7, and have lost $122.1 billion since their peak in early August, showing the massive steps taken by the central bank to protect the ruble from plunging.
The ruble has fallen 5% against a basket of currencies from its historic highs in the first week of August, just before the outbreak of Russia's military conflict with Georgia.
The central bank allowed the currency to weaken by 1% last week, prompting speculation that a devaluation will come gradually. However, many analysts advocate a one-step approach of dropping the ruble by anywhere from 5% to 20%.
The World Bank praised the Kremlin for policy responses aimed at limiting the impact of the global financial turmoil. It added, however, that more efforts are needed.
Russian President Dmitry Medvedev said Tuesday that the five trillion rubles ($182 billion) already pledged in stabilization measures isn't a final number. "We understand perfectly well the scale of the problem is such that it is possible further measures will need to be undertaken," Russian agencies cited Medvedev as saying.
Medvedev added that as the crisis has already spread into real economy sectors, many of them will need government support.
Investors have been pulling out of Russia at an accelerating rate since the summer.
Central bank statistics show $83 billion in net outflows in the past three months, with a monthly record of $50 billion in October alone, and reversing months of net inflows into the country. The World Bank forecasts falling oil prices will cut Russia's current account surplus by more than half, to $40 billion in 2009 from $100 billion this year.
The forecast still reflects a Russian economy that can finance itself in international trade, putting it in a much more secure position than other emerging economies.
Ukraine, for example, had to appeal to the International Monetary Fund for a $16.4 billion aid package to help it honor foreign payments, after plunging metals prices swelled its current account deficit.
But continued drops in oil and gas prices could eat deeper into Russia's payments surplus.
The World Bank's estimates are based on an annual average crude oil price of $101.5 a barrel in 2008 and $74.5 a barrel in 2009. Tuesday, oil prices were hovering just above $50 a barrel.
The World Bank now expects Russia's gross domestic product to grow by 6% this year and 3% in 2009, down from its previous forecasts of 6.8% and 6.5%, respectively.