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. Last Updated: 07/27/2016

Dealers Say Ruble Will Slide More

Strong dollar sales by the Central Bank kept the ruble stable for a fourth trading day on Thursday, but dealers said the ruble would slide as soon as the Central Bank eased its support.

The ruble's weighted average for today's settlement edged up to 29.1569 per dollar in the key unified session of eight exchanges compared to 29.1646 per dollar on Wednesday. Based as usual on the results of the unified session, the Central Bank left its official next-day rate unchanged at 29.16 rubles per dollar.

"It was a repetition of yesterday — the dollar rose to 29.20 [rubles per dollar] in the morning, then the Central Bank started selling [dollars] in the unified trade and achieved what it wanted," a dealer said.

Dealers said the bank sold about $200 million on the interbank market, raising its support level from 29.19 rubles per dollar to 29.17. It also intervened in the unified trade at 29.16-29.17 levels to maintain the official exchange rate.

"The market does not determine the exchange rate, it is set from above. It looks like a political decision was taken that we should stay at the same level [of the ruble to the dollar]," the dealer said.

Some market operators started speculative attacks against the ruble the morning after the Central Bank chairman said the government would raise its 2001 annual inflation forecast, said Nikolai Polunin, a dealer at Interprombank.

Viktor Gerashchenko told a banking conference earlier in the day that higher than expected inflation in the first five months of 2001 may prompt an increase in the annual forecast. The government based the 2001 budget on an inflation forecast of 12-14 percent.

Consumer prices rose 10.9 percent in the first five months of the year, up from 6.8 percent in the same period last year.