Moscow: The rouble rallied on Wednesday in volatile trading with traders saying that Russia’s central bank was again stepping into the market to try to halt the currency’s slide.

At 1040 GMT the rouble was up 0.5 per cent at 53.60 against the dollar and up 0.8 per cent at 66.12 against the euro.

The rouble had fallen almost 2 per cent in early trading, heading towards the psychologically significant level of 55 against the dollar. However, it then snapped back up, gaining around 2 per cent on the day, before settling back.

“Without doubt, the central bank is selling (foreign currency). The whole question is what volumes it is limiting itself too,” said a trader at a large Western bank in Moscow.

“In my view, to halt the speculative attack on the rouble, the central bank needs to sell $5-7 billion.” The central bank published interventions data earlier on Wednesday showing that it had spent $700 million to support the rouble on Monday. That was a relatively small amount compared with daily interventions that often topped $2 billion a day in October and only briefly supported the Russian currency.

The central bank had not intervened in the currency market since Nov. 10, the last day before it floated the rouble, although it said it could still intervene if financial stability were threatened.

Analysts have been wondering at what point the rouble’s breakneck decline over the past few weeks would qualify as a threat to financial stability.

The rouble fell over 4 per cent against the dollar on Tuesday, its biggest daily decline since 1998, after government forecasts projected a recession and a weak rouble in 2015.

It had crashed through the once-unthinkable level of 50 against the dollar on Friday, a day after Opec stunned global energy markets by leaving production quotas unchanged despite crumbling oil prices.

Russian stock indexes were positive on Wednesday, lifted by global markets after Wall Street hit a new record high on Tuesday.

The rouble-based MICEX was up 1.3 per cent at 1,592 points.

Earlier it had crossed the threshold of 1,600 points for the first time since March 2012, but retreated as a result of the rallying rouble.

The dollar-based RTS index was up 1 per cent at 935 points, having a hit a five-year low of 914 in earlier trading.