MOSCOW: The Russian rouble edged up on Tuesday, supported by higher oil prices and month-end tax payments that usually prompt companies to convert their dollars to meet local duties.
At 0739 GMT, the rouble was 0.1 percent stronger against the dollar at 66.20 and had gained 0.2 percent to trade at 74.82 versus the euro.
The rouble is likely to benefit from companies needing to pay up to 1.8 trillion roubles ($27.21 billion) in taxes in February, according to a Reuters survey of analysts.
"We believe exporters will increase their hard currency offer in coming days, ahead of looming taxes," VTB Capital said in a research note.
The rouble is seen firming into a range of 65-66 versus the dollar in the next few days if there are no negative sanctions-related news or a decline in investor appetite for emerging market currencies, Promsvyazbank said in a note.
The room for rouble gains, however, is limited by concerns about more U.S. sanctions against Moscow.
Last week, the threat of sanctions re-emerged as U.S. policymakers presented a new bill that was a tougher version of the one that failed to pass in Washington last year and included a proposal to impose restrictions on Russia's sovereign debt.
Yields of Russia's 10-year indicative OFZ treasury bonds, which move inversely with their prices, jumped to 8.5 percent last week, but soon declined and hovered near 8.28 percent on Tuesday.
Russia's finance ministry will be in focus later in the day as it will announce details of its auctions of OFZ bonds, the papers at risk of being targeted by the U.S. sanctions.
Oil prices were supportive for Russian assets as Brent crude oil futures hovered around $66.5 a barrel, near the $66.83 level - their highest since November - hit on Monday.
Gains in Russian stock indexes, however, were modest amid sanctions concerns.
The dollar-denominated RTS index was little changed at 1,177.0 points, while the rouble-based MOEX was 0.05 percent higher at 2,473.8 points.
"The Russian market is likely to struggle, once again, for direction today, mirroring the global trend, as investors look for fresh catalysts and wait for a breakthrough in trade talks," Alfa Bank said in a note to clients.
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