President Yeltsin's recent speech on currency reform temporarily restored some faith in the ruble as it strengthened Thursday to 334 to the dollar.


The exchange rate had fallen in each of the previous seven twice weekly trades at the Moscow Interbank Currency Exchange to a record low of 342 to the dollar on Tuesday, losing about half of its value since mid-August.


Alexander Potyomkhin, the head of international operations at the Russian Central Bank, said the bank had not intervened substantially and it was the market that had realized after a long time that it was unreasonable to buy dollars at any price.


He said, "I would like to think that this new elasticity of demand for dollars, together with President Yeltsin's remarks directed to increasing faith in the ruble, will help us stabilize the rate and the whole market".


He said Yeltsin's announcement Thursday, requiring the compulsory sale of 100 percent of foreign currency export earnings through the exchange, as opposed to the current level of 20 percent, would expand the currency market, not reduce it.


The volume of trade was $44. 57 million, down from $62. 48 million on Thursday, but still high enough to show the new rate enjoyed solid support. At the opening rate, supply was $49. 7 million but demand was only $36. 7 million.


Some signs are appearing that the ruble's fall on the exchange had outpaced its actual value. Black market rates have been reluctant to follow the lead of the official exchange, hovering around 290 to 310 to the dollar.


The volume of rubles brought to the market has stabilized over the last few weeks despite the recent falls in the exchange rate. Between 32 and 36 billion rubles have changed hands.


Some firms that are now distributing Western goods such as tobacco, liquor and shampoo on the Russian consumer market do not want to see the ruble fall further and have held off selling on the exchange. Western traders and their Russian distributors fear their goods will be priced out of the market.


A director of the currency exchange, Alexei Momontov said it was too early to tell whether the pick-up in demand for rubles and the fall in supply tor dollars was just a market "spasm" brought on by Yeltsin's comments or whether it was a result of real measures to stop the outflow of money.


Friday's meeting of Commonwealth of Independent States heads of government in Bishkek could help strengthen the currency if agreements can be reached on the emission of ruble credits by Commonwealth member states and the growing interrepublican debt.