For the second time this week, and in response to strengthening oil prices, the Russian central bank (CBR) has shifted the lower band boundary of the rouble.

According to local dealers, the CBR has moved the rouble’s band to a position of 34.60 versus the dollar-euro basket following its purchase of US$700 million on the market. The lower boundary had previously been at 34.65.

The Russian central bank maintains the rouble in a floating corridor, currently estimated by market participants to be at 34.60-37.60. In order to avoid rapid fluctuations in the rouble rate, the regulator shifts 5 kopeks for each US$700 million in purchases made.

On Tuesday, the CRB moved the lower boundary of the floating basket band by 5 kopeks to 34.65 so this is the second shift this week.

Oil prices have strengthened and headed towards US$81 a barrel today as China indicated it would maintain its economic stimulus. This has resulted in increased consumer confidence and a renewed interest in more risky but higher-yielding assets such as the Russian rouble.

Oil remains Russia's chief export and, together with gas production, accounts for approximately one third of the country's GDP.