The Bank of Russia shifted the ruble's trading band higher Monday January 27, 2014 for the ninth time so far in 2014, in response to continuing selling pressure on the Russian currency, which hit a fresh five-year low.
The central bank said on its website that it moved the ruble's floating trading band 5 kopecks higher to RUB33.50- RUB40.50 against the euro-dollar basket, which is the central bank's main gauge of the currency market.
Downward pressure on the ruble has intensified after Bank of Russia First Deputy Chairwoman Ksenia Yudayeva said in an interview with The Wall Street Journal that banks could withstand ruble rate fluctuations of up to 30%.
At the upper end, it sells dollars and euros to ease downside pressure on the ruble--the case in the past few months. The bank buys foreign currencies when the ruble strengthens toward the lower boundary of the band. Once an intervention allotment of $350 million is exhausted, it automatically shifts the corridor.