UPDATE 1-Russian cbank's Nabiullina sees no fundamental reason for rouble depreciation

Wed Mar 5, 2014 6:52am EST

NOVO-OGARYOVO, Russia, March 5 (Reuters) - The governor of Russia's central bank, Elvira Nabiullina, said on Wednesday she saw no fundamental reason for the depreciation in the rouble, as data on Russia's current account surplus remains favourable.

She cited preliminary data for the first two months of this year which showed that the surplus was better than last year, rising to $19.7 billion from $17.3 billion, with the country's trade surplus also up, to $36.3 billion from $32.5 billion.

"The central bank's current analysis indicates the undervaluation of the Russian currency, primarily in view of the surplus on the current account of the balance of payments," Nabiullina said.

The rouble has fallen 10 percent against the dollar this year amid outflows from emerging markets linked to tightening U.S. monetary policy, exacerbated in recent days by the political crisis in neighbouring Ukraine.

On Monday the central bank spent the equivalent of $11.4 billion to support the currency.

Nabiullina added that the central bank's recent interventions on the forex market did not change its plans to move to inflation targeting, and the bank's goal to reduce inflation to 5 percent by year-end could be met in light of the bank's recent measures.

On Monday, the central bank raised its key lending rate to 7 percent from 5.5 percent, citing risks to inflation and financial stability.

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