MOSCOW: The rouble touched a three-week high versus the dollar on Tuesday, helped by solid oil prices and central bank interventions, while stocks were hit by lingering uncertainty about a solution for the euro zone debt crisis.
Central bank chairman Sergei Ignatyev said on Monday the rouble was more likely to appreciate than weaken as long as oil prices remain at current levels.
Prices for Russia's Urals blend crude stayed at $107 per barrel, slightly below Monday's levels but far from September's lows of under the crucial $100 mark.
The rouble traded at 31.62 versus the dollar at 0900 GMT after briefly touching its strongest in three weeks at 31.32.
"The factors behind the rouble's rise are the same -- oil prices went higher... and the central bank's representatives have stepped up verbal interventions," analysts at Zenit bank said in a note.
Market players also said the rouble got a boost from speculators' interest in taking long positions at nominally weak levels, keeping in mind that further weakness in the currency will be addressed by central bank interventions.
Since early September the central bank has sold more than $10 billion from gold and forex reserves to ease the downside pressure on the rouble.
"The rouble should gain but if some negative sentiment emerges again I do not exclude some trimming of short currency positions, which could eventually result in the rouble's weakening on the thin market," said Andrey Mishko, a dealer at Nomos bank.
Versus the euro, the rouble firmed 0.1 percent to 42.98 and was steady at 36.73 versus the euro-dollar basket, the central bank's main gauge of the currency market.
"The Russian local currency has been underperforming its emerging market peers," analyst at VTB Capital said in a note.
"The recovery rally has pushed the Brazil real, Polish Zloty and Australian dollar 4-7 percent stronger against the dollar since the end of last week. Hence, we can expect rouble to catch up a bit," they said.
Stock markets came under pressure ahead of Slovakia's vote on expanding the euro zone bailout fund.
"The market has been growing for several days and now there is some kind of sobering," said Alexei Dolgikh at Troika Dialog.
The dollar-based RTS index was down 1.8 percent and the more liquid rouble-traded MICEX lost 2.0 percent.
Shares in the Russian coking coal and steel producer Mechel were down about one percent after the company's second quarter results came below expectations.