The Russian central bank has stepped into the foreign exchange market in a bid to hold up the rouble, which is being hurt by the conflict with Georgia.
By selling foreign currency, the Russian central bank is keeping the rouble around the 30.10 level against the dollar and euro basket.
The Russian currency has fallen by more than 40 kopecks since the close of the market on Friday August 8th due to violence between the country and neighbouring Georgia.
Deutsche Bank strategist Marc Balston told Reuters: "There was an initial reaction of shock felt in Russian debt spreads but now everyone is trying to understand if this is a short-term escalation in tensions or if there will be a negotiated ceasefire at some point."
Currency dealers also reported the Russian central bank buying roubles on the foreign exchange market on Friday, while Russian equities fell 6.52 per cent to a 14 month low.
Conflict escalated between Russian and Georgia over Thursday night after Georgian troops launched an assault on the separatist South Ossetia region.
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