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. Last Updated: 07/27/2016

Ruble Falls Closer to 31.50 Mark

The ruble slipped against the dollar Friday as a liquidity crunch sparked by end of month tax payments eased, and dealers expected the currency would hit the 31.50 threshold next week.

In the unified trading session of eight exchanges, which usually serves as the basis for the Central Bank's next-day ruble/dollar rate, the ruble eased to a weighted average for today settlement of 31.4471 from 31.4390 on Thursday.

"The market is betting on the ruble's weakening toward the promised 31.50 level [against the dollar], but those hopes are still strained by rather expensive rubles," said Vladislav Bogatyryov of Probiznesbank.

The Central Bank wants the ruble to average 31.50 to the dollar in 2002 and is targeting a year-end rate of 33 in an attempt to keep its real appreciation in check in order to help local firms stay competitive.

But hefty hard currency deliveries stemming from high crude prices and lower capital flight has seen the Central Bank buy up excessive dollars to reach that goal, even though that implies higher inflation by pouring extra rubles into the market.

Dealers said the Central Bank, which was seen buying dollars at 31.4350 in the previous session to erode the ruble's underlying strength, was not active Friday.

Dealers expect the ruble to hit 31.50 against the dollar in the first half of this week on the back of better ruble liquidity after firms meet their tax deadlines and banks place obligatory reserves with the Central Bank.