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. Last Updated: 07/27/2016

Ruble Tumbles To 29.22

The ruble hit a historic low against the dollar Monday as the Central Bank withdrew its helping hand from the national currency, dealers said, forecasting further ruble weakness.

The currency's weighted average for today settlement fell to 29.2168 per dollar in a unified session of eight exchanges after 29.1725 per dollar Friday.

Based as usual on the results of the unified session, the Central Bank cut its official next-day rate to 29.22 per dollar after 29.17 rubles per dollar Friday.

"As soon as the Central Bank steps aside, the flow overwhelms the dam and we go up [on the dollar]," said Mosneftekhimbank dealer Alexander Timofeyev.

Trade volume, which if high indicates the Central Bank's presence, was a thin $94.29 million after $152.94 million on Friday.

A Western bank dealer said that despite Central Bank intervention Friday with dollar delivery Monday, ruble liquidity was high due to exporters' direct sales of hard currency to the Central Bank.

Banks' balances on their correspondent accounts at the Central Bank, an indicator of banking-sector liquidity, rose to 83.61 billion rubles Monday from 79.80 billion rubles on Friday.

The Western dealer said the new level, likely to hold for a few days, was 29.25 rubles per dollar. However, he said, banks had a lot of long dollar positions, which would prevent the ruble from falling further.

Also, a Finance Ministry debt auction Wednesday was likely to soak up liquidity from the market — another factor that would support the national currency.

Timofeyev saw a support level at 29.30 per dollar. "If the Central Bank abstains from trading, it [29.30] is a matter of one or two days," he said.