Ruble Gains as Interbank Rates Drop

The ruble strengthened 0.2 percent against the Central Bank's dollar-euro basket Tuesday as falling local interest rates made it easier for companies to borrow.

The rate of interest Russian banks charge to lend money to each other dropped 24 percent Tuesday after lenders borrowed $13 billion in emergency funding Monday and the government pledged more than $100 billion to help stabilize interest rates and the slumping stock market last week. "With local rates declining quite rapidly, there's less tension in the money markets and that means less outflows," said Shahin Vallee, an emerging markets currency strategist in London for BNP. "The ruble is rallying as the situation normalizes and people get more comfortable."

The ruble rose to as high as 24.9421 to the dollar, its strongest level since Sept. 3, and was little changed at 25.02 at 6:49 p.m., from 25.03 late Monday. It strengthened to 36.87 per euro, from 36.98.