$16Bln Sold Last Week to Boost Ruble

The Central Bank sold around $16 billion to support the ruble last week, according to dealers' estimates, despite allowing the currency to weaken 1 percent versus the dollar-euro basket.

The ruble closed at 30.70 versus the basket on Friday, around the level seen as the new Central Bank support. It broke through the previously defended 30.41 mark on Tuesday.

Tuesday saw the heaviest interventions, estimated at $7 billion, as the devaluation took investors by surprise -- most had not expected it until next year.

The estimates suggest that the country's reserves are likely to post another hefty fall when last week's data is published on Thursday. Ruble interventions have already helped slash them by one-fifth in the last three months.

"Judging by the [dollar] purchases, the market is expecting that the Central Bank will take another devaluation step next week, maybe of 1 percent," said a dealer at an bank in Moscow.

There are signs that Russians are growing less confident in the ruble, with banks seeing outflows from ruble deposits and inflows into foreign currency ones.

"We believe that Russian households also rushed to buy hard currency on the news that the Central Bank had allowed the ruble to depreciate," VTB Capital said in a research note.

Faced with a weakening ruble, Russia has stepped up efforts to increase its use in international trade, though analysts doubt this will help in the short term.

Some are now predicting a devaluation of as much as 20 percent by the end of next year, although Kremlin's top economic aide Arkady Dvorkovich said Thursday that such a large weakening of the ruble was possible only if oil prices weaken to $8 a barrel from $50 currently.