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. Last Updated: 07/27/2016

Ruble Slips, Demand Expected

The ruble slipped marginally against the dollar Tuesday, with the Central Bank keeping strictly to its benchmark of 31.15, but dealers saw signs of higher demand for the currency.

They said the Central Bank spent up to $200 million propping up the ruble a day ahead of a parliamentary hearing to vote on President Vladimir Putin's choice for new Central Bank chief, Sergei Ignatyev.

The ruble eased in official early trade to a weighted average for today settlement of 31.125 to the dollar from 31.112 on Monday. Deals worth $69.57 million were completed. Based on the results of the official session, the Central Bank set the Wednesday ruble rate at 31.125 to the dollar.

"The situation is largely unchanged, with the Central Bank offering dollars at 31.15, the same rate as during the previous session, so the dollar did not go higher," said Boris Olshansky, the director of money markets at Guta Bank.

Dealers had anticipated a slight decline on the second day of trading after last week's surprise resignation by Central Bank chief Viktor Gerashchenko, who was closely associated with the country's strong ruble policy.

Ignatyev, his nominated successor, is almost certain to be approved by parliament Wednesday.

Ignatyev says he believes current exchange rate policy requires no major changes. Dealers said the Central Bank must have spent $150 million to $200 million to bolster the ruble for next day settlement.

The currency is also expected to receive a boost from a supply squeeze ahead of a 9 billion ruble treasury bond auction Wednesday and tax payments.

"Ruble demand is higher than that for dollars. It is coming both from resident and nonresident banks. Its rate now is determined by overnight credit rates rather than speculative pressure," Olshansky said.

The changes at the Central Bank's helm take place amid pleas from the business sector and senior officials to allow a more rapid depreciation to help competitiveness of local exporters.

But bankers expected no abrupt falls in the ruble.