MOSCOW: The Russian rouble strengthened against the dollar on Thursday, helped by rising foreign currency sales by exporting companies and expectations of a hefty interest rate hike by the central bank later this week.

By 0730 GMT, the rouble was 0.7% higher at 85.65 against the dollar.

Russia’s central bank is set to raise its key interest rate by 200 basis points at a Friday board meeting, according to a Reuters poll, as it struggles to contain inflation, fuelled by state spending and lending growth.

Trading in major currencies shifted to the over-the-counter market after Western sanctions on the Moscow Exchange and its clearing agent, the National Clearing Centre, were introduced on July 12.

Russian rouble strengthens, bolstered by foreign currency sales

Russian exporters started converting their foreign currency earnings into roubles ahead of corporate tax payments due on July 29. These sales are supporting the Russian currency.

Against the yuan, which had already become the most traded foreign currency in Moscow before the latest sanctions were imposed, the rouble firmed 0.6% to 11.75, according to an analysis of the OTC market.

It was up 0.5% at 92.98 against the euro.

Brent crude oil, a global benchmark for Russia’s main export, was down 0.4% at $81.21 a barrel on concerns over weak demand in China.