MOSCOW: The rouble fell sharply early on Monday, erasing gains of more than two weeks, as players ditched Russian assets on renewed fears Russia is preparing to invade Ukraine in the near future, a scenario Moscow dismisses as Western propaganda.

At 0501 GMT, the rouble was 0.5% weaker against the dollar at 77.59 after hitting 78.29, a level last seen on Jan. 28.

The rouble had first weakened sharply last month to a near 15-month low of 80.4125 on concerns Russia was planning to invade Ukraine, something Moscow has repeatedly denied.

It had pared those losses in recent weeks, hitting its strongest level on Thursday since early 2022, before falling again on Friday after the United States urged all its citizens to leave Ukraine within 48 hours.

Rouble steadies near 4-week high as traders eye Ukraine diplomacy

"It makes sense to eliminate risks related to Russia to a maximum and do not take any active moves with Russian assets before the risk of a military scenario is gone," said Evgeny Suvorov, an economist at CentroCreditBank.

Over the weekend, Western leaders sought to prevent the possible invasion with more talks with Russian President Vladimir Putin. US President Joe Biden called Putin, reiterating that the West would respond decisively to any such move.

Putin also spoke to French President Emmanuel Macron. A French presidency official said the Russian leader gave no indication he was preparing to invade Ukraine.Versus the euro, the rouble eased to 87.82 after touching its weakest level since Jan. 27 of 88.6950.

Even though the rouble is vulnerable to geopolitical fears, it retains fundamental support from Russia's record strong current account surplus amid high commodity prices.

It is also supported by the central bank's monetary tightening that, in theory, makes investments into rouble assets more attractive.

Russia raised its key interest rate sharply to 9.5% last week and indicated a further rate increase was likely.