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MOSCOW, Jan 21 (Reuters) - The Russian rouble extended the previous session's record jump against a euro-dollar basket on Wednesday, prompting the central bank to buy foreign currency for the first time in months and signalling at least a temporary halt to devaluation.
The rouble lost around a fifth of its value in just over two months after the central bank began a creeping devaluation process in November to adjust the exchange rate to reflect the collapse in oil prices and the worst economic outlook in a decade.
Up until Tuesday, keeping the depreciations gradual was costing Russia billions of dollars a day, taking its reserves down to around $426.5 billion from $600 billion in August.
But this week there were first glimmers of light that an end to the depreciation -- which has seen Russians shift money into dollars and euros, stunted the domestic bond market and hit companies' balance sheets -- could soon be over.
By 0758 GMT, the rouble was trading at 36.84 versus a euro-dollar basket, up 1.3 percent on the day after gaining a similar percentage the previous session.
Kremlin's top economic aide Arkady Dvorkovich on Tuesday said the bulk of the weakening was nearing its end and Finance Minister Alexei Kudrin forecast medium-term rouble gains.
Analysts remained cautious however, attributing much of this week's bounce to the need for roubles to meet tax payments.
"Of course it is a signal to those who were playing against the rouble that the trend is not that predictable," said Stanislav Ponomarenko, head of Russia research at ING.
"But it is too soon to say that this is the exact level at which the central bank will hold the rouble. This is linked to temporary factors, the shortage of roubles for tax payments. We will only be able to talk about a pause in two weeks."
Commerzbank Corporates & Markets estimated that around 90 billion roubles ($2.74 billion) are due in tax payments.
To help meet demand, the central bank has hiked up the amount of cash on offer at its daily repo auction and for the second day has set no limit on its currency swap operations -- another key source of liquidity.
Dealers said the central bank was nonetheless trying to keep the rouble's rebound smooth, buying dollars after months of interventions in the other direction.
The rouble rebound came even as a central bank official said the regulator had widened the rouble's trading band on both Tuesday and Wednesday -- moves which up until now resulted in the currency's immediate retreat to the new weaker boundary.
"It's possible this is a signal that they are going to change policy," said Julia Tsepliaeva, chief economist for Russia and CIS at Merrill Lynch.
"The widening of the band is reminiscent of an abandonment of the bi-currency basket...(when) there is no commitment to keep the exchange rate stable against the basket." (Reporting by Yelena Fabrichnaya, Andrey Ostroukh and Toni Vorobyova)