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. Last Updated: 07/27/2016

Ruble Gains Ground on The Dollar

The ruble rose to a 19-month high against the dollar Monday as demand for local currency for end-of-the-month tax payments propelled overnight ruble rates to 15 percent.

The currency for today delivery rose to a weighted average of 30.2431 per dollar, the highest rate since the start of 2002. The ruble traded at 30.3220 on Friday.

By 7:30 p.m. rubles for delivery on Tuesday firmed to 30.2555 with some dealers suspecting that the Central Bank had stepped in to the market to buy extra oil dollars at 30.2400 to ease the liquidity crunch.

"The market is under pressure from high overnight ruble rates, ongoing export revenue selling and a strong euro and it is but natural that the dollar fell to rates close to the Central Bank's support," a foreign bank dealer said Monday.

But another dealer from a large commercial bank said that the Central Bank abstained from intervention on Monday and the dollar found a solid support at 30.24 after big market players bought dollars to close their short positions.

Dealers noted solid dollar selling by domestic oil firms, which mopped up rubles from the market to pay mineral extraction and profit taxes.

To offset ruble shortages, banks rushed to the Central Bank's one-day repo auction, putting as collateral more than 3 billion rubles' worth of ruble-denominated securities at 6.17 percent, about half the rate seen on the interbank market.