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. Last Updated: 07/27/2016

Ruble Skids But Dealers Expect Stop

The ruble fell to a fresh low Wednesday on fears the Central Bank may have to dig into reserves to pay foreign debts after the International Monetary Fund decided to delay new loans for Russia, dealers said.

Based as usual on the average rate in the morning unified trading session of eight exchanges, the Central Bank set its official next day exchange rate at 26.87 rubles per dollar after a previous 26.82.

"There are problems with the IMF. It looks like the Central Bank will have to pay for foreign debts. That's why it is saving the reserves," Andrei Lisyev, a senior dealer at Dialogue Optim bank, said.

The IMF said Tuesday Russia must implement some of the structural reforms promised in July to the fund before the board approves disbursement of a long-awaited second $640 million tranche of a $4.5 billion loan.

The government has said that without external refinancing it would resort mainly to budget revenues to pay foreign debts in December.

However, Central Bank Chairman Viktor Gerashchenko has said the government may borrow from the bank's reserves to make a January debt payment.

Dealers said the Central Bank apparently sold small amounts of dollars in morning trade but did not intervene heavily. "I think the Central Bank is not trying hard enough to support the ruble," Lisyev said.

Dealers said the ruble was likely to hit 27 rubles per dollar in the next few days - a rate around which the Central Bank expected the ruble to stay at the end of the year.

"Everything will depend on the Central Bank," Sergei Gornev, a dealer at Avtobank, said.

Dealers said the ruble was likely to strengthen later in December as exporters would be selling dollar revenues and banks would be closing their 1999 books.