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Russia c.bank steps in for 2nd day as rouble weakens

Published 08/12/2009, 07:41 AM
Updated 08/12/2009, 07:42 AM
EUR/RUB
-

* Rouble at one-month low vs dollar, five-month low vs euro

* C.bank intervenes for second time after a month's break

By Andrei Ostroukh

MOSCOW, Aug 12 (Reuters) - The Russian central bank waded into the currency market for the second day running on Wednesday to keep the rouble from wilting further amid weak oil prices and disappointing economic data, traders and analysts said.

The regulator sold between $100 million and $200 million after a larger intervention on Tuesday of around $500 million, traders said. The last time the central bank noticeably stepped in to defend the rouble was on July 10 and 13.

Against the dollar on Wednesday, the rouble fell to 32.91, its lowest level since July 13. Against the euro , which has seen a broad surge in value, the rouble wilted to 46.41, the weakest since Feb. 25.

The central bank's intervention prevented the Russian currency from dropping below 39 to the dual currency basket, made up of 0.55 dollars and 0.45 euros and used by the regulator to guide its foreign exchange policies .

The regulator has vowed to keep the rouble trading within a range of 26 to 41 to the basket.

"Right now we are feeling around for the level where the central bank will stop us," said Viktor Anisimov of Alba Alliance bank. "But if it doesn't resist, then we can move past 39 (roubles to the basket)."

The central bank's last noticeable interventions a month ago came when the value of the currency fell to 39.04 to the basket.

Analysts said the pressure on the rouble stems from lower oil prices, a stock market correction and the news on Tuesday that Russia's economy saw its worst year-on-year contraction on record in the second quarter of 2009. [ID:nLB84099]

"I believe we are close to the end of this decline, but still there is a risk of seeing the rouble at 39.20 to the dual currency basket," said a currency trader at a local bank.

(Editing by Patrick Graham)

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