UPDATE 3-Russia allows 3rd rouble devaluation in 4 days

(Adds interventions, reserves, opinion poll, econ min)

By Toni Vorobyova and Anna Smirnova

MOSCOW, Dec 18 (Reuters) - Russia allowed the rouble to weaken for the third time this week on Thursday, speeding up a managed depreciation of the currency prompted by weak oil prices and the prospect of recession.

A strong euro offered a window of opportunity to let the currency fall for a second day versus the euro-dollar basket, taking the brunt of the rouble weakness and shielding companies and citizens who tend to focus on the dollar/rouble rate.

Having spent $100 billion on currency support since early August, Russia started a gradual devaluation on Nov. 11.

A central bank source confirmed Thursday's widening of the rouble trading band -- the eighth in under two months -- but declined to say where the new corridor boundaries were.

The rouble slumped to 33.11 to the basket on Thursday before recovering some of the losses to 32.86 . It has lost 8 percent since the regular devaluations began and over 11 percent from a mid-year peak. "It looks like the process is accelerating," said Stanislav Yarushevichus, head of trading at ING in Moscow, adding that 33.11 could be the new official support level but it was too soon to tell. Other dealers agreed about the level.

KEEP CALM

The dollar is the favoured savings currency of many Russians and was the unit in which some goods' prices were set in the aftermath of the economy's collapse in 1998, making it a bigger potential flashpoint than the euro.

The single currency has gained about 9 percent versus the dollar this week, heading for its best weekly showing ever , and Thursday's weakening of the rouble saw the euro gain nearly 3 percent to a record high of over 40 roubles .

Against the dollar, the rouble has held in a range of 27-28 roubles since the start of November though it is still around 20 percent off peaks reached earlier this year.

"They are speeding up the process because now we have such a move in the euro/dollar rate," said Natalya Orlova, chief economist at Alfa Bank.

"If the euro/dollar rate stabilises around these levels we probably won't see much more in the way of rouble depreciation this year. They are trying to keep the rouble dollar broadly stable...This stabilises the mood of the population."

The policy seems to be working -- 80 percent of Russians still prefer to be paid in roubles than any other currency, a public opinion poll showed on Thursday [ID:nLI342113].

A broadly stable dollar/rouble rate also makes life easier for the Russian companies who have dollar-denominated debt.

Service conglomerate Sistema [ID:nLI439567] and top dairy firm Wimm-Bill-Dann [ID:nLI87762] posted hefty falls in third quarter net profits on Thursday, citing FX losses due to the weakening rouble.

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Darkening the currency's future prospects, the Economy Ministry said on Thursday that 2009 will bring capital outflows of $90 billion, a current account deficit and an economic contraction lasting until at least mid-year [ID:nLI115148].

The ministry's 2009 dollar/rouble forecasts and euro/dollar assumptions [ID:nLH190875] suggest the rouble will be in the 34-36 range versus the basket next year.

Many analysts are more pessimistic. With oil prices at less than half the $95 level factored into next year's budget , and recession a possibility, Citi expects the rouble to end 2009 at 37.79, and this year at 34.94 to the basket.

If Russia continues to move in 45 kopeck steps, that would imply a further four devaluations in the remaining days of 2008.

Other analysts say a free float -- to which Russia had been slowly moving during the rouble appreciation days but which authorities have ruled out in the near future -- is the best way to limit pain for the economy and the drain on reserves.

Russia's gold and forex reserves have shrunk by a quarter since early August, and by $1.6 billion in the latest week, to stand at $435.4 on Dec. 12, data showed on Thursday.

Analysts said the data suggested last week's interventions amounted to around $14 billion, in line with dealers' estimates. So far this week the central bank is estimated to have sold around $6.5 billion, including $0.5 billion of that on Thursday.

-- For a FACTBOX on the rouble see [ID:nROUBLEFAC]

(Additional reporting by James Kilner, Andrey Ostroukh and Darya Korsunskaya; Editing by Patrick Graham)