Ruble Gains 1% Against Dollar

The ruble advanced against the dollar-euro basket last week after the Central Bank allowed it to edge upward to ward off speculative investors.

The Central Bank has widened the ruble's trading band against the basket twice since introducing a new currency policy in mid-May. To deter speculators from betting that faster inflation will force it to let the ruble appreciate this year, the Central Bank now allows the ruble to fluctuate more by buying and selling it at varied and unpublicized levels within the trading corridor. "They say the increased volatility will make speculators give up their bets" that the ruble will gain, said Tatyana Orlova, an ING economist. "But they're going to have to buy a lot of rubles to create the weakening they need to scare people off."

The ruble was at 23.25 per dollar on Friday evening, from 23.36 on Thursday, after earlier jumping to a nine-year high of 23.04. The ruble gained 1 percent against the dollar last week and was at 37 per euro, from 36.87, after sliding 0.3 percent in the week.

Those movements left the ruble at 29.42 versus the basket of 55 cents and 45 euro cents, little changed from Thursday, and 0.3 percent higher than a week ago.

The Central Bank will keep widening the band "symmetrically" as it tries to reduce the appeal of the ruble as a one-way bet, first deputy chairman Alexei Ulyukayev said Wednesday. A wider band provides more scope for it to fluctuate, raising the risk for investors placing so-called long positions on the ruble, fellow deputy chairman Konstantin Korishchenko said last month.