MOSCOW: The rouble reversed early losses to strengthen against the dollar on Tuesday, as higher oil prices helped the Russian currency tide over the end of a favourable month-end tax period, and investors awaited the US Federal Reserve’s policy meeting.

The Fed is all but certain to raise interest rates by 75 basis points on Wednesday, but investors will look for any signals that the pace of interest rate hikes may decelerate in the future.

By 1225 GMT, the rouble was 0.2% stronger against the dollar at 61.38 and had lost 0.1% to trade at 60.96 against the euro. It had shed 0.4% against the yuan to 8.42.

The rouble has now lost the support of month-end tax payments, that usually see exporters convert foreign currency revenues to pay local liabilities.

The rouble may attempt to weaken past 62 against the dollar, Banki.ru chief analyst Bogdan Zvarich said.

“In the course of trading we expect pressure on the national currency to remain, which will be facilitated by the lower supply of foreign currency from exporters due to the passing of the peak of tax payments,” Zvarich added.

The rouble is the world’s best-performing currency this year, supported by capital controls and a collapse in imports as a result of Western sanctions on Russia over its actions in Ukraine, and scores of foreign companies pausing operations in the country.

But imports have recovered around 90% since their April low, the Institute of International Finance said last week, and are close to levels seen before Russia sent tens of thousands of troops into Ukraine on Feb. 24.

That resurgence, along with rising inflationary risks, will put pressure on the rouble in the medium term, said analysts from First Asset Management.