Russia devalued the ruble for the third time in a week, sending the currency to its lowest level against the dollar since January 2006, as oil's drop below $39 a barrel dimmed the outlook for growth.

The ruble, down 18% against the dollar since the beginning of August, weakened 0.9% against the US currency to 28.6862 and 1.4% versus the euro to 40.1539, near an all-time low.

The central bank allowed the ruble to fall about 1% against a basket of dollars and euros, accelerating the slide after spending 27% of reserves, or $162.7 billion, trying to defend the currency over four months.

Oil, Russia's biggest export earner, lost 4.7% on the New York Mercantile Exchange and is down nearly 75% since the July high.

The government requires oil to average $70 to balance its 2009 budget.

"As long as oil remains depressed and at many year lows the central bank has no other choice but to carry on with its evaluation," said Mikhail Galkin, head of fixed income research at MDM Bank in Moscow.

The currency has fallen 14% against the dollar and 11% versus the euro this year amid the plunge in oil, international condemnation of the country's war with Georgia and the spreading global credit crisis.

BNP Paribas SA estimates investors withdrew $211 billion from Russia since August. The nation's oligarchs, who helped bail out the government after the collapse of the Soviet Union in 1991 and took over assets of the biggest companies, are vying for $78 billion of Kremlin loans to meet debt payments.

Source: dnaindia.com