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The rouble soared most since 1998 and Russian stocks surged as the government sold dollars and the central bank said it will help companies meet foreign-currency debt obligations.
The currency gained 11.2 per cent to 60.6995 a dollar by 6:24 pm in Moscow, ending a seven-day, 22 per cent drop. The Bank of Russia said lenders won't have to write down the value of assets affected by the weaker rouble and falling bonds, allowing banks to use the third-quarter exchange rate in valuing risk-weighted assets. Shares of OAO Sberbank, the nation's largest lender, jumped 38 per cent in London, the most since at least 2011.
The central bank measures, which also include the provision of foreign-exchange loans and additional repurchase auctions, come after the finance ministry bought roubles on Wednesday to arrest the worst depreciation since 1998. Russian markets went into freefall on Tuesday as a surprise interest-rate increase failed to shore up investor confidence. Wednesday's advance trims the rouble's slide this year to 47 per cent.
"Authorities made a combined effort, giving strong signals to the market that they are doing anything it takes to stem the rouble rout and turn things around," Bernd Berg, a London-based emerging-market strategist at Societe Generale SA, said in e-mailed comments. "As a result the rouble is gaining strongly."
Russian lenders and companies are concerned about coming foreign-currency debt payments, central bank First Deputy Governor Ksenia Yudaeva said in an e-mailed statement on Wednesday. The measures are intended to balance supply and demand to help stabilise the rouble rate as soon as possible, she said.
The dollar-denominated RTS Index of shares jumped 17 percent, the most since 2008, to 737.34. Russian government 10-year bond yields dropped 2.76 percentage points to 13.30 per cent, after Tuesday reaching the highest since at least 2007.
Brent crude slid 0.3 per cent on Wednesday, taking its decline since this year's June high to 48 per cent. Russia gets about half its budget revenue from the proceeds of oil and gas sales.
The central bank has spent $10 billion in foreign exchange this month and raised the key interest rate by 7.5 percentage points as it sought to stabilise the rouble. The Bank of Russia said two days ago it would raise the limit on 28-day foreign- exchange repurchase auctions to $5 billion from $1.5 billion.
On Tuesday, Economy Minister Alexei Ulyukayev said Russia isn't considering implementing capital controls. Lawmakers from Russia's third-largest parliamentary party last week proposed forcing companies to convert as much as half of their foreign-currency revenues to roubles within seven working days of receipt.
"A mix of factors, including a squeeze in FX funding rates to near 40 per cent, finance ministry FX conversions and the increased government focus on exporters' FX revenue conversions is helping the rouble on Wednesday," Arko Sen, a senior strategist for eastern Europe, Middle East and Africa at Bank of America Corp. in London, said by e-mail. "We expect rouble behaviour to remain very volatile and depend significantly on the oil price outlook."
