Ruble Up As Firms Pay Taxes

The ruble snapped a three-day decline against the dollar as Russian companies with income in foreign currencies bought rubles to meet a tax deadline and as concern that credit-market losses will widen pushed the U.S. currency lower.

The Russian currency rebounded from an almost seven-month low to the dollar as local firms purchased rubles to pay a total 230 billion rubles ($9.4 billion) of taxes due Thursday, said Alexei Moiseyev, head of fixed-income research at Renaissance Capital.

"Tax payments are one of the reasons why the ruble has come back a bit," he said. "Another is that the dollar is weak and so investors are looking for other places to put their money."

The ruble rose to 24.6094 per dollar by 5:44 p.m. in Moscow, from 24.6621 Tuesday, when it slid to 24.7676, its weakest level since February. It fell 0.3 percent to 36.2538 per euro.

The dollar slipped from a six-month high versus the euro as oil rose and after the U.S. Federal Deposit Insurance Corp. said the number of problem banks has increased to the most in five years as a result of turmoil in credit markets.

The ruble was steady at 29.8508 to the dollar/euro basket.

Many export-driven natural resource companies make the bulk of their earnings in dollars.

"That necessitates them having to change it over to pay tax,'' said Moiseyev, who forecasts the ruble will rise to 29 versus the basket by year end.