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By Bloomberg

Russia's central bank spent $980 million on Oct. 3, the biggest intervention to stem the ruble's slide since President Vladimir Putin's incursion into Ukraine in March.

The monetary authority shifted the upper boundary of the ruble trading band by 10 kopeks to 44.60 yesterday, according to a statement on its website today. That signals it spent at least another $700 million because, according to official guidelines, it sells $350 million before shifting the boundary by 5 kopeks. The ruble was little changed against the target dollar-euro basket to 44.5099 by 11:55 a.m. in Moscow, having slumped the most in the world versus the dollar in the past three months.

"This does not mean that further weakness is ruled out," Vladimir Osakovskiy, a Moscow-based economist at Bank of America Corp., said in e-mailed comments today. "The trading corridor will be adjusted in line with any potential future interventions."

Putin is paying the price for his decision to smash the post-Cold War order in eastern Europe as the U.S. and European Union impose sanctions on his economy and investors pull money out of the country. Before resuming interventions last week, Russia spent $40 billion in the currency market this year through May. The ruble lost 14 percent of its value against the dollar in the past three months.

Falling Reserves

Russia's international reserves have fallen for six straight weeks and stood at $456.8 billion last week. Markets tested the boundary of the central bank's currency corridor this month as corporate demand for foreign currency grows after sanctions curtailed access to western debt markets.

The rate on a three-year ruble-dollar basis swap reached 290 basis points today, the least since at least 2006, when Bloomberg began compiling the data. Negative rates signal traders will pay a premium to obtain dollars and the central bank has said it will start to offer foreign currency swaps to ease the pressure in "several weeks."

Fighting continued today in eastern Ukraine amid moves to establish a buffer zone to help cement a wobbly truce that went into effect a little more than a month ago between government forces and pro-Russian separatists.

"The central bank is prepared to follow the rules, clearly presuming that this is enough along with the promise of the currency repo," according to ING Groep NV's Dmitry Polevoy.