* Rouble stronger than 30 vs dollar for 1st time since Jan
* Dealers on alert for intervention at 36.35-36.40 vs basket
* Fin Min says oil correction likely to stem rouble rally
(Adds Kudrin comments, closing prices)
By Toni Vorobyova and Andrei Ostroukh
MOSCOW, Sept 23 (Reuters) - The Russian rouble strengthened beyond the psychological 30 mark versus the dollar on Wednesday for the first time since January, putting the market on alert for possible central bank intervention to slow down the rally.
Greater confidence that Russia will avoid a second wave of crisis, domestic liquidity constraints before tax payments, recent firm oil prices and broad-based dollar weakness were all cited as reasons for rouble strength.
The rouble went as far as 29.94 per dollar according to Reuters data, up 6 percent since the start of the month. It closed at 29.97. "Everyone is now looking at the central bank's policy -- possibly it will not allow the rouble to pass the psychological level of 30 (versus the dollar) for long," said Anton Tabakh, analyst at Troika Dialog.
Prime Minister Vladimir Putin has said that Russia will not allow excessive currency appreciation. Too strong a currency could hurt Russia's efforts to build up its manufacturing sector just as the economy is showing signs of emerging from its first recession in a decade.
Analysts and officials suggested that even without central bank interventions, the rouble rally could be short-lived, especially if oil prices correct.
Versus the central bank monitored basket of 0.55 dollars and 0.45 euros, the rouble firmed as far as 36.41.
That level was last seen in early June, around the time when the central bank was intervening with dollar purchases as part of its policy to avoid excessive exchange rate volatility.
"It (rouble strength) is fairly predictable. The dollar is losing positions on every front," said Alexey Borichev, trader at ING. "We expect that the central bank could come out around 36.40-36.35 levels."
Two other dealers also highlighted those levels as possible intervention triggers. "Perhaps people have decided to test it," one of them said. "Other emerging market currencies have really strengthened in the past month and we are now playing catch up," he added.
SHORT-LIVED?
The rouble strengthened as the dollar hit a one-year low versus an index of six major currencies on Wednesday. Russia's Urals oil blend held around $70 a barrel, $13 above the level factored into the 2009 budget.
"Such a price has always been a factor for (rouble) appreciation," Finance Minister Alexei Kudrin told reporters.
"I do not think it will keep rising, and if it does it will be temporary. We see oil averaging $58 next year -- at such a price there will neither strengthening of the rouble nor devaluation." He added that even now, the rouble remains weaker in real terms than a year ago, giving Russian companies a boon.
For the time being, domestic factors also supported the rouble as exporters sought Russian currency to pay taxes. Renaissance Capital estimates that 70 billion roubles' ($2.3 billion) worth of mineral extraction taxes are due by the end of the week.
Illustrating the liquidity squeeze, demand at Wednesday's two repo auctions hit a total of 163 billion roubles, 23 billion more than was on offer for the day.
A strong performance on domestic stocks also helped, with the RTS index setting a fresh 1-year high on Wednesday.
In the longer term, the domestic environment could also weigh, with economic data still mixed and the central bank set to press on with interest rate cuts in the next few months.
"We see limited upside potential for Russia's currency," UniCredit analysts said in a research note. "We believe it is in Russia's best interest to keep the rouble at or above this level, and see the retirement of liquidity provisions by the central bank and quantitative easing as the key fundamental factors, keeping the rouble's rally short-lived." (Editing by David Stamp)