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. Last Updated: 07/27/2016

Ruble Falls Below 31.5 Threshold

High liquidity put pressure on the ruble Monday pushing it below the 31.50 threshold against the dollar to hit the average annual target set by the Central Bank for 2002.

In the unified trading session of eight exchanges, the ruble fell to a weighted average for today settlement of 31.5002 from 31.4471 on Friday. Based on the results the Central Bank set the next-day rate at 31.5002 to the dollar.

The fact that the currency has hit the Central Bank target has boosted the credibility of the bank, analysts said.

"The Central Bank has demonstrated it is confident that it can implement the monetary policy that has been chosen while maintaining high reserves, a growing economy and keeping budget revenues in order," said Yulia Tseplyayeva, an analyst with ING bank. "It is good -- a predictable policy is sometimes even better than beating targets by a considerable margin as predictability implies officials make realistic forecasts and do not just talk about what they would like to see."

The Central Bank has said it sees the ruble's year-end rate of 33 as it wants to keep its real appreciation in check to help local producers stay competitive with imports.

The nominal ruble exchange rate has been falling against the dollar, but at a slower pace than the rate of inflation. It effectively firmed more than 9 percent against the dollar in real terms last year.

Dealers said the Central Bank stepped into the market Monday to sell dollars at 31.51 level to prevent the ruble's further fall.