MOSCOW, Jan 23: The Russian rouble will fall to the new lower value allowed by the central bank by mid-February amid increasing expectations the currency will eventually be allowed to free float, analysts said on Friday.

The rouble is currently permitted to move only within a trading corridor set by the central bank against a currency basket composed of 0.55 per cent dollars and 0.45 per cent euros.

The central bank surprised markets on Thursday with an announcement that it was implementing a substantial widening of the currency band, effectively allowing the rouble to devalue by up to 10 per cent.

Responding to the financial crisis that has hit Russia hard and caused billions of dollars in capital outflows, the central bank had until now carried out 20 very slight devaluations of the ruble.

The market’s reaction Friday to the central bank’s latest move was muted with the rouble only slightly losing value against the currency basket rather than the full devaluation allowed by the central bank.—AFP