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. Last Updated: 07/27/2016

Ruble Hits 8-Month Low Point

The ruble fell 22 points to an eight-month low of 4,815 on the Moscow Interbank Currency Exchange on Tuesday as investors, mindful of falling yields on T-bills, bought dollars.

"There is nothing special in this, although the fall in the ruble was quite abrupt," said Agroprombank chief dealer Alexander Suchkov.

The 22-point fall brought the MICEX fix into line with Monday's interbank market, where rubles for Tuesday's settlement were quoted at 4,810-14. Interbank rubles fell to 4,833 per dollar Tuesday, pointing to further falls on MICEX.

The ruble last traded at this level in mid-June. The last one-day drop of such magnitude was a 25-point fall last July, although it slipped 21 points Jan. 4 and Sep. 7.

Suchkov said the Central Bank was gradually devaluing the ruble against the dollar to make life easier for exporters.

The government and bank have pledged to maintain the ruble in a trading corridor of 4,550 to 5,150 to the dollar through the end of June, but they are considering other options to maintain the currency's stability after that period.

Initial demand on MICEX on Tuesday was $108.79 million and initial offer was $10.31 million.

"The Central Bank decided not to interfere very actively at MICEX and let the banks do what they wanted, and that is why the MICEX [dollar] rate rose 22 points today," Suchkov said.

Dmitry Slobodnik, chief dealer at Aljba Alliance bank, said many investors were buying dollars in preference to T-bills, where annual yields are down to 55 percent from around 100 percent at the start of the year.

Nikolai Dudin, head of Tveruniversalbank's ruble foreign exchange desk, said the ruble's fall also had been fueled by commercial bank speculation, and that the currency would slip by three to four points a day in coming days.