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By Bloomberg

The ruble fell for a second day as speculation mounted that the Russian central bank may cut rates more than forecast this week and demand for the currency to pay taxes ebbed.

The declines pared the ruble’s advance to 19 percent this year, still the best of any currency globally. Government five- year bonds rose, lowering the yield two basis points to 11.46 percent for a drop of 1 percentage point this month.

While economists see the Bank of Russia delivering a 100 basis-point cut when it meets on Thursday, comments by officials last week fueled wagers policy makers may opt for a steeper reduction. Traders now predict 140 basis points in cuts for the next three months, compared with 115 basis points a week ago, forward-rate agreements show.

“Policy makers’ verbal interventions are pressuring the ruble and there are expectations that the central bank will cut the key rate by a bigger amount following the rally,” Alexei Egorov, an analyst at PAO Promsvyazbank in Moscow, said by phone. “Exporters seem to be taking a break from buying rubles for tax payments.”

The currency traded 0.8 percent weaker at 51.2990 against the greenback by 12:10 p.m. in Moscow. Oil, Russia’s main export earner, fell 0.2 percent to $65.15 per barrel in London.

The ruble’s rally this year is crimping government revenue from oil exports and freeing central bank Governor Elvira Nabiullina to continue unwinding an emergency 6.5 percentage- point increase in December at the peak of Russia’s market turmoil. Last week, Finance Minister Anton Siluanov said the ruble was too strong and central bank Deputy Governor Ksenia Yudaeva said the oil-driven rally was over.

All 32 analysts surveyed by Bloomberg expect Bank Rossii to reduce its key rate by at least 100 basis points from 14 percent when policy makers meet, with 11 forecasting a bigger cut.

The dollar-denominated RTS index of stocks rose 0.2 percent, taking its year-to-date advance to 31 percent. The ruble-based Micex gained 0.7 percent to 1,694.44.