(Adds c.bank comments)
* Russia allows second rouble weakening in two weeks
* Currency weakens 1 pct to as far as 31 vs basket
* C.bank says widens trading corridor by 30 kopecks each way
By Yelena Fabrichnaya and Toni Vorobyova
MOSCOW, Nov 24 (Reuters) - Russia's central bank allowed the
rouble to weaken by one percent versus a euro-dollar basket for
the second time in two weeks on Monday, in a move which is seen
as part of a gradual depreciation policy.
The rouble weakened around one percent to as far as 31.01
versus the basket in the first few minutes of trade before
stabilising around the 30.92 mark
"It is a technical decision. We have allowed the widening of the corridor by 30 kopecks in each direction," the central bank's press office told Reuters.
It has come under heavy pressure as the oil price collapses, investors flee emerging markets and local companies, and ordinary Russians start to shift some of their money into foreign currencies.
The central bank -- which has admitted it spent $57.5 billion defending the currency in September and October -- first allowed a one percent weakening on Nov. 11, letting the rouble slip past the previously-defended 30.41 level to around 30.71.
With Russia's reserves down by over a fifth from their early August peaks and some of the cash earmarked for an economy rescue package, analysts had expected further devaluations.
Authorities' comments also seemed to leave the door open for a gradual rouble weakening, with Prime Minister Vladimir Putin and others focusing their rhetoric on ruling out sharp moves.
"The central bank ... has entered a phase of gradual devaluations. Today is not the last step," said Ulrich Leuchtmann, analyst at Commerzbank Corporates & Markets in Frankfurt.
"The central bank will try to do it as slowly as possible but it's restricted by the fact that ... they are running out of ammunition to defend the rouble and at the same time the rouble remains under pressure."
Before the global financial crisis sent waves through Russia, the central bank had been working towards a move to inflation targeting in the medium term, and to this end had been gradually widening the rouble's trading band.
Until August, Russia's strong macro fundamentals and high oil prices meant each widening led to a rouble appreciation. The rhetoric about the widening of the corridor has stayed the same, though now the moves are accompanied by a rouble weakening and officials no longer make explanatory remarks.
OIL, ECONOMY POINT TO MORE WEAKNESS
The price of Russia's benchmark Urals crude has fallen to
around $42 a barrel
Some analysts have said the central bank could take
advantage of any temporary dollar weakness to make a
rouble/basket devaluation less worrying for ordinary Russians
who tend to focus on the dollar/rouble rate
On Monday, the dollar was down 1 percent against a basket of six major currencies <.DXY>.
Alexander Turbanov, the head of Russia's deposit insurance agency, said on Monday that banks likely saw deposit outflows of 5-7 percent last month. Russians are taking money out of rouble accounts, and putting only part of it in foreign currency deposits instead.
Signs of economic weakness -- illustrated by October data released last week including the slowest annual industrial production growth in over 6 years [ID:nLL295426] -- add further weight to the argument for a weaker rouble.
Monday's move suggests "the central bank, and more broadly the government, understands that it needs to try to loosen super-tight monetary conditions in the face of a significant deterioration in the growth outlook," Martin Blum, analyst at UniCredit, said in a research note, forecasting that the basket would reach 35 roubles in 2009.
On the day of the last rouble weakening, the central bank spent an estimated $7 billion defending the new rate -- as much as during the whole of last week. [ID:nLO661035] [ID:nLL638018] (Writing by Toni Vorobyova; Editing by Ruth Pitchford)