(Updates prices, adds analyst comment, S&P)
By Toni Vorobyova and Andrei Ostroukh
MOSCOW, Feb 3 (Reuters) - Russia's rouble weakened to within a whisker of its official support level on Tuesday, but profit-taking helped defer a widely-anticipated showdown between the central bank and investors for another day.
Russia has spent a third of its reserves, or some $200 billion, ensuring the rouble's depreciation is gradual and the public is protected from a 1998-style currency collapse despite weak oil prices and the worst economic outlook in a decade.
But with the rouble now down by some 28 percent versus a euro-dollar basket since August, the central bank has sought to put a floor under the currency, vowing to defend the 41 level with currency market interventions and interest rate hikes.
The rouble has gradually edged towards that level in recent sessions, closing just half a percent away from it on Monday.
Many had expected a showdown on Tuesday, but the rouble ended the day at 40.86 -- still 14 kopecks or a third of a percent shy of the central bank's defences. "People are continuing to take profits ahead of the central bank offer. The central bank has effectively stated that it will fight to the death," said a dealer at a European bank in Moscow.
Dealers said the central bank was not buying roubles, but had placed offers in the market at the 41 level.
"Maybe they will try to attack the central bank in the nearest future, but ... no one wants to take big positions (yet)," said a dealer at a Russian bank, giving a 50-50 chance of 41 being reached on Wednesday.
The weaker rouble and a sharp economic slowdown have forced job and salary cuts, galvanising thousands of Russian opposition supporters to march through key cities on Saturday.
BRACING FOR BATTLE
Russia has used many tools to defend the rouble, making it harder for the banking sector to obtain roubles to sell by raising rates on a range of Lombard and repo operations and gradually reducing the amount of funding it offers.
Reducing rouble liquidity may tempt banks to change their own foreign currency holdings into roubles.
"The battle will take the form of them tightening the screws (on liquidity) and trying to limit the spending of reserves," said Anton Tabakh, analyst at Troika Dialog.
"It's hard to say before the battle has started, but I don't think it will be an easy fight."
Most analysts seem to have some faith in the central bank's ability to win, with a Reuters poll last week showing the rouble at 41.56 to the basket by year-end -- only slightly outside the current band -- and 35.95 per dollar.
"We think that the rouble will not be allowed to weaken beyond this level (41 to the basket), as by abandoning its previously announced band boundaries the central bank would undermine credibility of its policy and provoke heavy selling pressure on the rouble," ING said in a research note.
"The FX and money market may be facing a few turbulent days or weeks. In an effort to stem weakening pressure on the rouble, the central bank may resort to sharp rate hikes, the withdrawal of liquidity support, and massive FX sales in the market."
Markets are sceptical on the likelihood of the rouble finding a floor soon, with 12-month non-deliverable forwards (NDFs) showing the rouble at 44 per dollar.
Standard & Poor's expects that the rouble will average 40 per dollar this year, Russian news agencies reported on Tuesday, while the Economy Ministry forecasts an average of 35.1. (Reporting by Toni Vorobyova and Andrei Ostroukh; Editing by Ruth Pitchford)