MOSCOW, June 2: Russian Prime Minister Dmitry Medvedev on Saturday ordered the central bank to step up currency interventions to halt the losses of the ruble, which this week hit its lowest level for three years.

The ruble came under its biggest attack since the 2008-2009 financial crisis as investors fled to safe havens amid the trouble in the eurozone and were also spooked by the falling price of oil.

Russia's central bank regularly intervenes to keep the ruble within a floating range against the euro and the dollar but Medvedev called for firmer action.

“There can of course be different emotions but there are rules, including on the currency corridor, and the central bank should implement them,” he told the head of the Russian central bank Sergei Ignatiyev.

“Interventions should be stepped up, naturally keeping an eye on the economic situation, European trends and the oil price,” he said at the meeting at his Gorky residence, quoted by Russian news agencies. Ignatiyev revealed that on Friday alone the Russian central bank had used $200 million to support the ruble and stop it weakening beyond a certain range.

A dramatic loss in the value of the ruble would be a nightmare for the government of President Vladimir Putin, which is hoping economic stability will keep a lid on an unprecedented outburst of opposition protests.

Ignatiyev predicted that if the price of oil — Russia's main export — appreciated then the ruble would strengthen but if crude fell it could weaken further.

“But not at the speed that we have seen (in the last week) as we will use currency interventions much more actively,” he said. “In general, the situation is under control.”

Russian news agencies said Medvedev and Ignatiyev agreed in the meeting that the central bank should keep the ruble within its corridor, which is fixed at between 32.15 rubles and 38.15 rubles against a euro/dollar currency basket.

Russia is currently enjoying relatively robust growth and a low budget deficit compared to its debt-laden partners in the eurozone. But investors are extremely worried by the extent of capital flight which amounted to $35 billion in the first quarter alone.

The Russian ruble extended losses on Friday to hit a new three-year low in value against the dollar and the euro which policymakers blamed squarely on the woes affecting the eurozone.

The news that Brent crude prices sank under $100 a barrel for the first time in eight months put further pressure on the ruble after a dramatic slide on Thursday, raising concerns about Russia's budget receipts from its main export.

In currency trading in Moscow, the ruble ticked up 31 kopecks against the dollar to 33.79 rubles and moved higher 35 kopecks against the euro to 41.77 rubles.

However, officials were swift to argue that the pressure was caused by investors fleeing to safe havens due to the troubles in the eurozone, rather than any inherent problems with the Russian economy.

“What is going on in the currency market has just one cause — an external one, that is the situation in Europe,” Russia's Central Bank chief Sergei Ignatyev was quoted as saying by the Interfax news agency.

“Unfortunately the signs of crisis are intensifying in Europe and European politicians have not offered the market a clear action plan to overcome these difficulties.”

Analysts have said that the market was surprised in the last days that the central bank had not been repeating its habit of making substantial currency interventions whenever the ruble came under pressure.

But Ignatyev said the bank was now involved in substantial interventions as the rate was now not far off the ruble's upper currency ceiling within which it is supposed to trade.

“We are already quite intensively carrying out currency interventions and selling euro/dollar,” he said.

Ignatyev said that it was “not the first time” there had been pressure on the ruble — which was massively played on by speculators in 2009 — and said he did not believe the currency doomed to losing value.—AFP