The Russian ruble dropped to a three-year low against the dollar on Friday, as a senior central bank official dismissed rumours of a sharp New Year's Eve devaluation as "complete nonsense."
His comments came after the central bank allowed the currency to weaken slightly in the 11th such devaluation in the past two months.
The central bank's official exchange rate fell Friday to 29.0058 rubles per dollar, according to its website. The last time the ruble's value flirted with the level of 29 rubles to the dollar was in December 2005.
The Russian currency has lost nearly 20 percent of its value against the dollar since August amid the global financial crisis and plunging prices for oil, the country's main export.
In a bid to reassure Russians that the currency would not fall sharply while they were distracted by the holidays, deputy central bank chief Alexei Ulyukayev promised any fall would be gradual.
"Some strange information has been spread that the central bank is planning to sharply weaken the ruble 10 minutes before trading ends for New Year," Ulyukayev said in an interview with Vesti-24 television.
"This is complete nonsense and there will be nothing of the sort," he said, promising instead a policy of "gradual changes" which would be "less painful for market participants and householders."
Meanwhile the central bank allowed the ruble to weaken slightly against its benchmark dollar-euro currency basket.
The basket, composed of 55 percent dollars and 45 percent euros, was worth 34.15 rubles compared with 33.85 on Thursday, a weakening of just under one percent, the RIA Novosti news agency reported.
A central bank official confirmed to AFP that it had widened the corridor within which the ruble is allowed to trade against the basket.
The move -- which effectively amounts to a devaluation -- is the 11th such widening since November and the third this week.
The ruble has been under strong downward pressure since the start of the global financial crisis due to falling oil prices and huge capital outflows.
The devaluations lessen pressure on the bank to buy rubles to maintain the currency's value, after it spent tens of billions of dollars on the currency markets in recent months.
Russian President Dmitry Medvedev said in an interview televised Wednesday that the exchange rate should be "more flexible than in the past so that internal economic problems are not created."
Analysts say they expect the ruble to continue to weaken in coming weeks, even though officials have promised that there will be no drastic fall as Russia suffered in the 1998 financial crisis.
Source: AFP Global Edition
