Russian currency reserves drop $31B in one week

The central bank said in a statement its international foreign exchange reserves fell to $484.7 billion as of Friday, down from $515.7 billion a week before.

That's the biggest weekly drop this year and brings the bank's reserves to the lowest level since January as Russia's finances get battered by the global financial crisis and falling oil prices.

The ruble has declined steadily since Russia's August war with Georgia, losing around 13 percent of its value against the dollar as investors pulled money out of the country and prices in oil and natural gas--upon which Russia's wealth depends--dropped sharply.

Without intervention by the central bank, which began in early September, analysts say the Russian currency might have fallen farther and faster.

Earlier this week, First Deputy Prime Minister Igor Shuvalov--one of the Kremlin's point men on the economic crisis--tried to reassure investors, saying the government was "not afraid of running out of money."

Until this summer, the ruble had been gaining for several years on the back of higher oil, gas and mineral prices, reaching 23.14 against the dollar in July, its highest level in 9 years.

But since then, the ruble has slipped, closing at 26.95 against the dollar on the MICEX exchange on Wednesday.

On Thursday, the ruble strengthened markedly to 26.6 rubles to the dollar in MICEX trading, reflecting a dollar plunge in the wider global currency markets.

Some of the central bank funds may also be directed at efforts to bolster Russian banks. The official in charge of Russia's deposit insurance program told the Kommersant business daily Thursday that between 20 and 40 banks could need bailing out.