The Russian rouble eased against the dollar on Friday, but held most of the previous session’s gains, with all eyes on the central bank, which is expected to hike rates for the first time in more than a year as inflation pressure intensifies.

The Bank of Russia is widely expected to raise its key interest rate by at least 50 basis points to 8% later on Friday.

Data this week showing rising inflationary expectations has led some analysts to predict even tighter monetary policy.

At 0646 GMT, the rouble was 0.2% weaker against the dollar at 90.37 and had lost 0.3% to trade at 100.76 versus the euro.

It had shed 0.2% against the yuan to 12.60.

The central bank will announce its rate decision at 1030 GMT and Governor Elvira Nabiullina will shed more light on monetary policy and other issues at a news conference at 1200 GMT.

Pressure has intensified on the Russian currency after an abortive armed mutiny by the Wagner mercenary group in late June.

Russian rouble slides to near 16-month low vs euro

Attacks on Russian infrastructure have also dampened risk appetite.

The central bank has blamed the rouble’s weakness on falling exports and recovering imports.

In June, Russia’s balance of payments was negative for the first time since 2020.

“That’s bad news for the rouble,” said Alfa Bank Chief Economist Natalia Orlova. “Another problem is that more and more export revenues are paid for in roubles,” she added, meaning that Russia receives a reduced amount of its foreign trade surplus in foreign currency.

Higher oil prices, easing domestic demand for foreign currency and upcoming month-end tax payments by exporters should buttress the rouble.

Brent crude oil, a global benchmark for Russia’s main export, was up 0.9% at $80.33 a barrel.