MOSCOW: The rouble firmed on Wednesday to a near four-week high against the dollar and the euro, and stock indexes climbed higher, as traders took heart from diplomatic efforts to calm tensions between Russia and the West over Ukraine.
At 0735 GMT, the rouble strengthened 0.3% to 74.80 versus the dollar, a level last seen on Jan. 13. Versus the euro, the rouble added 0.3% to 85.37, also its strongest level since Jan. 13.
The rouble has been on the mend after hitting a near 15-month low of 80.4125 in late January when Western powers threatened to impose more sanctions if Russia invaded Ukraine. The Kremlin has denied having any such plans.
This week, the rouble extended gains after French President Emmanuel Macron met Russia's Vladimir Putin in Moscow and said he believed steps can be taken to de-escalate the crisis, calling on all sides to stay calm.
Rouble firms to near 4-week high vs dollar
"More high-level 'shuttle diplomacy' is ahead this and next week, suggesting the swords of each camp will remain sheathed for now, at least, which should further ease market jitters," BCS Global Markets said in a note.
The finance ministry is in focus as it will offer two series of OFZ government bonds at weekly auctions that it had to cancel earlier this year amid a wide-scale sell-off on Russian markets.
Demand for OFZ bonds usually props up the rouble, which can get extra support from the central bank that is expected to raise its key interest sharply to 9.5% on Friday.
Russian banks, which are the main OFZ buyers at the moment, are looking for clues from the central bank on when the rate-hiking cycle could be over "to bet heavier on the long end of the bond spectrum," Rosbank analysts said.
Russian stock indexes were up.
The dollar-denominated RTS index rose 1.7% to 1,515.3 points. The rouble-based MOEX Russian index was 1.2% higher at 3,594.7 points, its highest level since Jan. 17.
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