MOSCOW - The Russian central bank said on Tuesday it had sold $26.45 million at an auction aimed at helping foreigners repatriate roubles frozen after the 1998 domestic bond market crisis.

This was the second consecutive dollar auction when foreign investors bought fewer dollars from the central bank than they were offered.

Total demand at the auction, which took place on October 11, was $26.45 million, the central bank said in a statement. The amount on offer was $50 million.

The dollars were sold at an average rate of 31.96 roubles per dollar. The minimum accepted rate was 31.70 roubles per dollar. The central bank's officia rate on Friday was 31.6703 roubles per dollar.

The central bank's hard currency auctions aim to repatriate roubles that foreigners received when rouble-denominated treasuries were restructured after the 1998 financial crisis.

Foreigners can buy dollars at auctions, where the currency up till recently was priced well above the market rate, or by keeping them for months in special non-interest bearing "transition" accounts.

At the previous auction in September, the central bank sold $27.98 million at an average rate of 32.37 roubles per dollar. The amount on offer was also $50 million.

Analysts had urged the central bank to lift restrictions and lock foreign investors' funds in the country, finally erasing one of the last legacies of the 1998 financial meltdown and showing that market sentiment towards Russia has changed.

In April the central bank pledged to phase out all restrictions gradually over 12 months, and lifted some of them. It favours a cautious approach as it fears any abrupt move could trigger a rush.

Analysts have said the removal of the restrictions might not lead to an outflow of funds because much of the money has been profitably invested in Russian bond and equity markets which have recovered strongly after the 1998 crisis.