* Rouble scales new highs vs basket on strong oil
* More gains possible next week
* Banks may start buying rouble ahead of tax period
* Fundamentals favour rouble
(Adds quotes, background, updates prices)
By Andrey Ostroukh
MOSCOW, April 9 (Reuters) - The Russian rouble rose to new highs on Friday after a short-lived correction and traders said was poised for more gains next week, given strong oil prices, impending tax payments and supportive fundamentals.
Versus the euro-dollar basket
On Friday, the head of the Russian central bank Sergei Ignatyev confirmed dealers' assumptions, saying the floating corridor is currently located at 33.70-36.70 roubles against the basket. He added that the exchange rate will become more flexible as Russia moves towards a free float [ID:nMOS007553]
The regulator moves the band by 5 kopecks after $700 million of interventions at each boundary in a bid to smooth excessive volatility. Since mid-February, it has made 26 such steps.
The rouble got a boost from oil prices that broke a two-day decline and returned above $85 per barrel, ensuring new money inflows into Russia's export-orientated economy. [O/R]
According to EPFR data, inflows into Russia continued in the week to April 7 -- the eighth consecutive week of positive flows and the fifth week of outperforming other BRIC countries.
"The present market mood may be described as 'betting slightly on firming' (of the rouble)," said Mikhail Azizbayev, a dealer at Metallinvestbank.
Versus the dollar, Russia's currency was up 19 kopecks at
29.26
SOLID SUPPORT
The rouble -- which has been on a broad appreciation trend since late January -- will likely retain support from commodity markets next week, said a dealer at a Western bank in Moscow.
Russian exporters are expected to convert part of their dollar or euro revenues into roubles to meet tax payments that are due from next week.
"We saw inflows from London at the end of this week, new portion of exporters' revenues is to come next week and we will test the central bank's bid", the dealer said.
Interest rates differentials continue to favour the Russian rouble. The central bank has been cutting rates since last April, bringing them to record lows, but with the refinance rate at 8.25 percent rouble-denominated assets provide higher yields than assets denominated in many other currencies.
The central bank has not yet decided whether to cut interest rates again in April and may raise rates towards the year end, its chairman Sergei Ignatyev said on Friday [ID:nLDE6380N1], potentially further boosting the rouble's yield appeal.
Non-deliverable forward contracts for dollar/rouble hit the
lowest levels since pre-crisis summer 2008, with three-month NDF
implied yields falling as low as 3.2 percent
(Editing by Ron Askew)