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. Last Updated: 07/27/2016

Ruble Recovers To 1,553

The ruble bounced back from all-time lows on Thursday, climbing 3.4 percent on the Moscow currency exchange as Russia's political crisis rumbled on.


But dealers said the rise did not mean the fragile currency was heading for a lasting recovery. Everything would depend on how markets reacted to Russia's new government and the future course of economic reform.


"I'm not rushing to sell my dollars. The situation is still very critical," said Alexei Obozintsev, deputy head of Toko Bank.


Exchange booths and commercial banks, which have struggled all week to cope with a frenzied run on the ruble, took little note of the currency's rebound to 1,553 to the dollar from 1,607 on Wednesday. They asked as much as 1,900 rubles per dollar, up from around 1,750 on Wednesday.


Traders said the ruble had been in line for a rebound after a 15 percent slump in just three days.


"We were expecting the dollar to fall," said Oleg Martynenko of Dialog Bank. "Banks were running out of rubles and demand became smaller."


Dealers said the market was still worried about whether economic reforms would continue to follow last year's track under a new government team.


The ruble eased only slowly in the second half of last year, despite monthly inflation averaging around 20 percent.


It fell almost 30 percent in the first 19 days of this year before Thursday's unexpected 3.4 percent rise.


Officials at the Moscow Interbank Currency Exchange said the Central Bank put large volumes of dollars up for sale before Thursday's trading session started, pushing initial supply above initial demand.


This paved the way for a ruble recovery and the Central Bank even withdrew $10 million from sale once the dollar started heading sharply lower. Trading volume was $156.9 million, well below Wednesday's record $193.75 million.


Central Bank deputy chairman Dmitry Tulin denied media reports the bank planned to stop selling dollars to avoid draining its currency reserves.


"This year there has not been a single day without our intervention. Reports the Central Bank plans to stop intervening are not true," he told a news conference.


Tulin said the ruble's drop was partly an overdue technical correction to events in 1993.


Russian prices rose 10-fold over the year, but the dollar had only risen three-fold, he said.