MOSCOW: The rouble hit a one-week high against the dollar on Monday, paring last week's heavy losses after Moscow said it was ready to continue dialogue with the West over the Ukraine crisis.
At 0848 GMT, the rouble gained 0.6% to 77.37 to the dollar after touching 77.2425, its strongest since Jan. 24.
The Russian currency sunk to a near 15-month low of 80.4125 last week, battered by rising tensions between Moscow and the West, which has threatened to slap fresh sanctions on Russia should it take aggressive steps towards neighbouring Ukraine.
Russian rouble rebounds from near 15-month low as Ukraine fears ease
"The geopolitical situation remains up in the air - the temporary lull in tensions may leave room for further upside if shocks are avoided," said BCS Global Markets in a note.
The rouble could firm past 77 today, said Promsvyazbank analysts, forecasting a target range of 76.5-78 to the dollar this week, provided there were no news shocks.
Against the euro, the rouble was 0.3% higher at 86.41 .
Russia said last week the United States and NATO had not addressed Moscow's main security demands in their standoff over Ukraine but said it was ready to keep talking.
Moscow has repeatedly denied accusations it plans an invasion.
Western nations have promised tough economic sanctions should Russia make an incursion into Ukrainian territory. The US Senate is close to reaching a deal on legislation to target Russian banks and sovereign debt.
Russia is also grappling with persistently high inflation, setting the central bank on course for another significant rate increase at its next meeting on Feb. 11, after seven hikes brought the benchmark rate to 8.50% from 4.25% in 2021.
The Eurasian Development Bank (EDB) forecast annual inflation would reach 8.7%-8.9% at the end of January, well above the central bank's 4% target.
"In the current situation, we see a likely key rate hike in February by one percentage point to 9.5%," the EDB said.
Brent crude oil, a benchmark for Russia's main export, was up 1% at $90.93 a barrel, near a more than seven-year high and supporting Russian stocks.
The dollar-denominated RTS index was up 2.6% at 1,443.2 points. The rouble-based MOEX Russian index gained 1.6% to 3,543.7 points, earlier clipping a two-week high.
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