MOSCOW: Russia's rouble gained on Tuesday, paring the losses on Monday triggered by Russia's seizure of Ukrainian naval ships off the coast of Russia-annexed Crimea.
The standoff between Russia and Ukraine reminded investors of 2014, when Moscow annexed Crimea and was stung by Western sanctions. But the West's initial and no promises of immediate sanctions have helped the market to calm down.
The rouble was 0.5 percent stronger at 66.75 versus the dollar as of 0748 GMT, heading away from its weakest level since mid-November of 67.36 hit the day before.
"Not the harshest reaction of the Western countries to rising geopolitical tensions over the weekend and the first signs of de-escalation have allowed the sell-off (in the rouble) to halt in late trade (on Monday)," said analysts at Rosbank, subsidiary of Societe Generale.
On Tuesday, the rouble is likely to keep on trying to rebound, pricing in the current newsflow, Rosbank said.
Versus the euro, the rouble gained 0.6 percent to 75.55 .
The finance ministry is in focus on Tuesday as it decides whether to hold a weekly auction of government bonds on Wednesday and what volume of bonds, known as OFZs, to offer.
Demand for OFZ bonds is seen as a gauge of market sentiment, given uncertainty about whether Washington will impose sanctions on holdings of Russian state debt.
"In the current conditions the finance ministry will likely have to limit the offering of OFZs or cancel the auctions at all," said Dmitry Polevoy, chief economist at Russian Direct Investment Fund.
Brent crude oil, a global benchmark for Russia's main export, was down 0.4 percent at $60.27 a barrel but headed away from this year's low of $58.41.
Russian stock indexes were up after posting losses the day before.
The dollar-denominated RTS index was up 1.5 percent to 1,100.5 points, the rouble-based MOEX Russian index was 1.0 percent higher at 2,330.7 points.
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