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. Last Updated: 07/27/2016

Ruble Firms on Heavy CB Intervention

The ruble bounced back against the dollar Friday as heavy Central Bank interventions this week and traditional year-end demand triggered a sharp liquidity crunch in the national currency, dealers said.

The ruble's weighted average in a unified session of eight exchanges, the basis for the Central Bank's official next-day rate, jumped to 30.0754 from a previous 30.2568.

The Central Bank later hiked its next-day rate to 30.08 rubles per dollar from a previous 30.26 -- well above a record low set Monday following a 12 kopek drop in trade.

Dealers said that frustrated the many market participants, who had been speculating on a further slide in the ruble.

"The Central Bank carried out hard currency interventions in the previous few days. Aside from that, banks and their clients really do need rubles to close their books for the year," said Andrei Lisyev, head of hard currency operations at Dialog Optim.

"Therefore, on the market there is a [ruble] liquidity crunch and a lack of demand for dollars. Those speculating on dollar growth were forced to cut long hard currency positions."

Dealers have said that with the ruble pressured in earlier sessions by low oil prices, the Central Bank had been forced to sell hundreds of millions of dollars to underpin the currency including some $650 million or more Tuesday, its biggest one-day intervention in months.

"The market reacted very strongly to the insufficient supply of rubles," said Vladislav Bogatyryov, head of financial operations at Probiznesbank.