MOSCOW, December 17. /TASS/. The Russian government and the Central Bank are seriously working on measures to stop “bacchanalia” on the domestic foreign currency market, presidential aide Andrey Belousov said on Wednesday.

“Finally, the central bodies, including the monetary authorities, have started to seriously deal with the problems on the currency market where the effect can be achieved through consolidated actions,” Belousov said.

A government meeting held by Prime Minister Dmitry Medvedev on Wednesday, which elaborated tactics of the government’s actions, is an example of how some consolidated decisions in the actions of the government and the Central Bank were reached, the presidential aide said.

“Much will depend on oil price fluctuations but I can tell you as a participant in this process [the government’s decisions] that the government and the Central Bank have started to deal with the problems seriously to stop this bacchanalia on the currency market,” the presidential aide said.

Russia’s Finance Ministry announced earlier on Wednesday it was starting to sell the remainder of its foreign currency funds on the market.

The move is part of the government’s new measures elaborated on Tuesday to stabilize the domestic foreign currency market and prop up the ruble.

“The Finance Ministry considers the ruble to be significantly undervalued and starts selling the balances of its foreign currency funds on the market,” the ministry said in a statement.

Russia’s Central Bank made a decision at its extraordinary board meeting on Tuesday to hike the key rate determining the borrowing cost for commercial banks to 17% from 10.5% amid the rapidly depreciating national currency.

Simultaneously, the regulator increased the limits of foreign currency repo auctions for a term of 28 days to $5 billion from $1.5 billion. The regulator has also decided to hold similar auctions for a term of 12 months every week.

The Central Bank will provide loans against non-market assets for a term of 2 to 549 days at a floating rate comprising the key rate plus 1.75%

The regulator said in a statement its decision to increase borrowing costs for commercial banks was prompted by the need to restrain devaluation and inflationary risks that had sharply increased lately.

The ruble briefly strengthened against the dollar and the euro on Tuesday after the rate hike decision but subsequently resumed its free fall.

The US currency was seen to fall to 58.15 rubles and rise to 80.1 rubles on Tuesday and the single European currency to decrease to 72.45 rubles and climb to 100.74 rubles.

The ruble switched to growth on the Moscow Exchange on Wednesday after its further decrease at the start of trading.

As of 11:10 a.m. Moscow time (07:10 GMT), the euro fell by 7.26 rubles from Tuesday’s close to 77.89 while the dollar lost 5.24 rubles to 62.26 rubles.

The Russian currency went down by 5.2 rubles against the dollar at the start of a trading session on Wednesday to 72.7 rubles and by 7.04 rubles against the euro to 92.19.

Uralsib Chief Economist Alexey Devyatov welcomed changes in the Central Bank’s policy towards holding foreign currency repo deals through cuts in the volumes of ruble repos.

“This measure, to our mind, can help stabilize the ruble, which is currently significantly undervalued, we believe. We also think that in addition to reducing the volume of ruble repos, the Bank of Russia may further raise the key rate to support interest rates on the inter-bank loan market in the floating target interval,” he said.

Russia’s Central Bank may have to raise the key rate by another 500-800 basis points to 22-25%, the expert said.