Rouble falls past 61 vs dollar as conversion of depository receipts begins

MOSCOW (Reuters) -The rouble slid past 61 to the dollar on Monday as the conversion of depository receipts in Russian companies to local shares got underway, and as foreign investors from designated "friendly" countries were able to return to the bond market.

At 1029 GMT, the rouble was 1.5% weaker against the dollar at 61.49, leaving the narrow range between 59.45 and 61.45 where it had spent nine trading session in a row.

It eased 0.2% to 62.44 against the euro.

Rouble volatility has declined recently after wild swings which saw it hit a record low of 121.53 to the dollar on the Moscow Exchange in March, days after Russia sent tens of thousands of troops into Ukraine on Feb. 24, and then rally to a seven-year peak of 50.01 in June.

The rouble is expected to find support from month-end tax payments that usually prompt export-focused companies to convert part of their foreign currency revenues.

On stock markets, the dollar-denominated RTS index fell 1.4% to 1,100.2 points, while the rouble-based MOEX Russian index was flat at 2,147.6 points.

Market moves were relatively muted despite analysts predicting an increase in selling pressure as Russia starts the conversion of global depository receipts (GDRs) into shares.

GDRs of Russian companies that were traded on foreign exchanges and held in Russian depositories will be converted into shares on the Moscow Exchange from Aug. 15 in an effort to reduce foreign control over such companies amid Western sanctions.

The central bank said on Monday that the Russian depositories, which currently hold GDRs, will write them off from the holders' accounts and credit the shares of Russian issuers instead. The whole process will take up to three weeks, the central bank said.

"Depositary receipts start being converted to equities today, which could create a supply overhang and make it difficult for the stock market to rise," Promsvyazbank analysts said, forecasting a slide in the MOEX index to below 2,100 points.

From Monday, Moscow Exchange will also allow non-residents from designated "friendly" countries that have not imposed sanctions against Russia to trade bonds.

"We do not expect this to have a significant impact on the FX market," Sberbank CIB analysts said.

Yields on benchmark 10-year OFZ treasury bonds nodded lower to 9.16% from Friday's close of 9.18%.

(Reporting by Andrey Ostroukh; Editing by Kirsten Donovan and Jan Harvey)