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. Last Updated: 07/27/2016

Ruble Hits 14-Month High of 31

The ruble climbed against the U.S. dollar to a 14-month high Monday with the country's robust export data suggesting that a steady inflow of oil dollars would keep the local currency strong for at least another month.

The Russian currency powered ahead almost 10 kopeks to a weighted average for a today settlement of 31.0130 to the dollar from 31.1029 on Thursday, after the Central Bank pulled out its three-week old dollar bid at 31.10, dealers said. The market was closed Friday for the Victory Day holiday.

Dealers said the market seemed to have stabilized a tad above the 31.0 level as many feared that the Central Bank, which usually moves fast to curb what it judges to be an exchange-rate volatility, may resume its interventions.

"We may say with a 90 percent certainty that the Central Bank will appear at 31.0. This threshold is very difficult to cross. The market has already lost its nerves and closed most of short [dollar] positions at 31.10," a dealer at a large commercial bank said.

The International Monetary Fund urged the Central Bank on Friday to focus its monetary policy on taming inflation rather than reining in the ruble's strength.

But dealers said the Central Bank, under pressure from the local business lobby and country's top economy managers, might choose to contain the ruble's gains by buying dollars at 31.0.

"We have to be sure that the Central Bank defends this level. If this is the case, we may hover around the current level for a week or 10 days," the dealer said.

ING Bank analysts said Russia's strong export data for March indicated the ruble will remain under an upward pressure until the middle of June as local firms have to repatriate export proceeds within three months.

"The ruble could strengthen toward 30.8-31.0 against the dollar in the next few weeks but weaken to 32.2-32.4 to the dollar in the second half of 2003," ING Bank said in a research note.

According to the Central Bank data, March exports jumped 36 percent year on year, putting the country's foreign trade surplus at $5.6 billion, the highest monthly reading since November 2000.