* C.bank buys dollars for first time since mid-February
* Rouble gains over 1 pct against euro-dollar basket
* RTS share index climbs 6.77 pct to three-month high
* Sberbank leads stock market gains
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By Andrei Ostroukh and Antonina Vorobyova
MOSCOW, March 19 (Reuters) - Russia's central bank bought dollars to restrain the rouble's rise on Thursday for the first time since mid-February, driving Russia's key share index to a three-month high, led by the national savings bank.
As crude oil futures rose to their highest level since Dec. 1, the central bank bought dollars at around 38.90 roubles against a euro-dollar basket, 10 kopecks above the mark a bank official highlighted as a likely boundary for near-term currency fluctuations a month ago.
It gained over 1 percent to 38.83 against the basket.
The RTS share index <.IRTS> rose within a point of the 700 mark, a high since December. The dollar-based index climbed 6.77 percent, putting Russia on course for a third week of gains.
"Russia focused investors are being squeezed into the market," said Kevin Dougherty, fund manager at Pharos Financial Group. "If oil stays above $50 that is going to keep happening."
Russia spent around a third of its reserves, or some $200 billion, over several months from last August on buying roubles to offset pressure on its currency from tumbling oil prices, the global crisis and the worst domestic outlook in a decade.
However, this month the currency has steadied and begun to appreciate again with Russian shares in tow. The central bank last intervened to stop the rouble strengthening on Feb. 13.
In January, the central bank set the rouble's trading band at 26 to 41 per basket, but said it could intervene within these parameters to avoid excessive exchange rate volatility.
The central bank's first deputy chairman, Alexei Ulyukayev, told Reuters a month ago that in the near future the exchange rate would likely fluctuate in the 39-41 range.
The dealers, who declined to be named, said they saw the central bank's new bid level at 38.83.
OIL RALLY, DOLLAR WEAKNESS
The rouble benefited from the oil rally and broad-based dollar weakness after the U.S. Federal Reserve stunned investors on Wednesday by saying it would buy long-term debt in an effective printing of money.
"It's oil and the external backdrop. Everything is against the dollar," said a dealer at a European bank in Moscow.
As the rouble and European financial sector rallied, state
savings bank Sberbank
"In this market it is so much about sentiment, and the government is clearly trying to do things to support the sector," Dougherty said.
In an interview with RIA news agency published on Thursday, Ulyukayev said the central bank was happy with the rouble around 39-40 for now, but made no commitments to defend the 39 level.
Russia signalled the end of the devaluation process two months ago, when the central bank unveiled new boundaries.
Ulyukayev said the central bank had not intervened in the currency market for a month and a half.
"The results of the first quarter may push them (market participants) to the idea that the scope for strengthening is greater than the scope of weakening," he was quoted as saying.
"It is quite likely that in the second half both the current account and the capital account will be noticeably more positive than we had expected up until now," he added.
He also did not exclude that the central bank could begin to cut interest rates in the second quarter to support the economy. Previously Russia had hiked rates to prop up the rouble.
Data on Thursday showed that Russia's gold and forex reserves, still the world's third largest, fell $4.4 billion in the latest week to $376.1 billion.
Analysts say the falls in reserves in the past couple of weeks, in the absence of dollar-selling interventions from the central bank, were probably partly caused by commercial banks reducing foreign currency held on correspondent accounts. (Additional reporting by Melissa Akin and Yelena Fabrichnaya; Editing by Ron Askew)