MOSCOW: The Russian rouble clipped a more than two-year high against the euro in early trade on Tuesday before stabilising near Monday’s close, in a week where tax payments are supporting the currency and as investors look ahead to an expected rate cut on Friday.

At 0817 GMT, the rouble had gained 0.3% to trade at 76.90 versus the euro, after earlier hitting 75.95, its strongest mark since early March 2020. It was 0.1% stronger against the dollar at 73.04. Trading activity remains subdued and somewhat erratic compared with levels seen before Feb. 24, when Moscow sent tens of thousands of troops into Ukraine.

Movements in the rouble are artificially limited by capital controls imposed by the central bank, and the economy faces soaring inflation, capital flight and the risk of a possible debt default after the West imposed tough sanctions.

Russian companies due to pay income tax on Thursday should give the rouble additional support this week, said Promsvyazbank analysts.

But the payment period for Russia’s mineral extraction tax ended on Monday, which could limit upside for the rouble. Payments in April may have hit a new record, according to analysts’ estimates.

“During this week, foreign currency sales by exporters after a recent easing of currency controls could practically end and the rouble, probably, will come under pressure,” said Sberbank CIB.

The market is also looking ahead to Friday’s rate decision. The central bank is widely expected to cut its key interest rate by 200 basis points to 15% as it tries to stimulate more lending in the economy in the face of high inflation, a Reuters poll showed.

Lower rates support the economy through cheaper lending but can also fan inflation and make the rouble more vulnerable to external shocks.

Russian stock indexes were climbing.

The dollar-denominated RTS index was up 3% to 969.6 points. The rouble-based MOEX Russian index was 2.8% higher at 2,247.9 points.