The Russian rouble hit multi-year lows on Thursday, resuming its rapid fall after a rebound the previous day and losing half a percent against the dollar and more than 1 percent versus the euro.

At 9 a.m. ET, the rouble was trading 0.5 percent lower versus the dollar at 34.08, falling year-to-date by 2.7 percent and sliding to its lowest level since June 2012.

Against the euro, which firmed broadly on better-than-expected euro zone business activity data, the rouble was down 1.3 percent at 46.5 – its weakest in nearly four years.

Brent crude’s fall below $108 per barrel <O/R> added to the rouble’s demise, as oil remains Russia’s chief exports.

“Fundamentally, the currency is undervalued, but sentiment towards the rouble remains negative,” Vladimr Tikhomirov, an analyst at Otkritie Capital, wrote in a note. “However, given the persistent and acute liquidity problems in the banking sector we believe that downside risks for the rouble at its current levels are limited.”

Tikhomirov reckons the rouble could trade 4-5 percent higher in nominal terms by the year-end.

On Wednesday, President Vladimir Putin defended Russia’s new policy of allowing the rouble to float, which is to be formally completed by next year but is already having a major impact on central bank actions.

In a symbol of the rouble’s growing flexibility, the central bank said on Thursday it has shifted the rouble’s trading corridor down for the second day in a row. The corridor now extends from 33.4 to 40.4 roubles against the dollar-euro basket.

The rouble was down 1 percent against the basket at 39.71, its weakest since March of 2009.

The rouble is trading near the edge of the corridor where the central bank spends $400 million a day on interventions, enough to ensure daily shifts in the corridor, which occur after $350 million is expended.

Russian stocks rose, with the rouble-denominated MICEX index capitalizing on the rouble’s weakness and gaining 0.6 percent to 1,507.7 points.

“Good euro area statistics, combined with the weakening of the rouble on the forex market, have brought Russia’s high-liquidity stocks higher,” said in a note Alexei Bystrov, deputy head of Olma investment house in Moscow.

Steel producer Severstal (CHMF.MM) was up 1.2 percent, gas producer Novatek (NVTK.MM) gained 2.9 percent and diamond miner Alrosa (ALRS.MM) pocketed 2.7 percent.

Russian gas company Gazprom (GAZP.MM) kept throughout the session its 1 percent gains recorded early in the day after the company published stronger-than-expected nine-month results.

The gains could have been higher, should Gazprom have signed the expected gas deal with China on Wednesday.

“It looks like the parties are still far from agreement and the China deal is being delayed again. We treat the news as negative for sentiment,” VTB Capital analysts commented.