MARKETS FORCE RUSSIA TO CUT FIXED RATE FOR RUBLE

MARKETS FORCE RUSSIA TO CUT FIXED RATE FOR RUBLE

The Russian central bank bowed to pressure from the market Wednesday and lowered the value of its fixed "market rate" for the ruble.

Central bank figures showed the bank was offering a rate of 100 rubles per dollar, compared with 90 last week.The so-called market rate is used for some compulsory currency exchange by firms earning hard currency. It has changed three times this year.

Black market dealers on Moscow's busiest tourist streets are offering up to 125 rubles per dollar. Companies paid an average of 160.4 rubles per dollar Tuesday in small-scale trading sessions organized by the central bank.

The weekly sessions, held at the Moscow International Currency Exchange, offer a clue to the free-market value of the Russian currency because they give a limited number of banks the chance to bid for dollars and other currencies.

The ruble, far from convertible on world markets, is still legal tender in all 15 countries that once made up the former Soviet Union, although many of these states plan to abandon the unloved currency soon.

Russia has said it will keep tight control over the volume of rubles in circulation. Uncoordinated moves by other republics to introduce their own currencies could face a harsh Russian response, including tough financial sanctions.

Russian central bank and government officials have made no secret of their wish for a stronger ruble although they accept that they cannot force a higher ruble on a reluctant market.