MOSCOW: The Russian rouble reached a seven-month high against the dollar on Monday, supported by high oil prices and interest in the country's sovereign bonds.
The rouble was 0.3 percent firmer against the dollar at 64.60 at 0730 GMT, its strongest since Aug. 8.
The rouble also firmed 0.2 percent to 73.25 against the euro, a level last seen in early August last year .
Later this week, markets will be awaiting signals from the central bank on its rate outlook. Analysts widely expect that the bank, which hiked the rate twice last year to keep inflation under control, will keep the key rate at 7.75 percent at its board meeting on March 22.
"We think that the upcoming week will be positive for the rouble," Rosbank said in a note. "The expected first signals from the central bank towards a softening of its policy at its meeting on Friday will support demand for Russian assets."
Prices for Brent crude oil, a global benchmark for Russia's main export, rose slightly on Monday after slipping earlier due to concerns that an economic downturn could dent fuel consumption. But crude markets remain supported by supply cuts by OPEC and U.S. sanctions against Iran and Venezuela.
The rouble has been supported in recent weeks by foreign investors' growing interest in Russia's OFZ government bonds, demand for which serve as a gauge for market sentiment toward Russian assets.
The central bank said this month that foreign investors had increased their holdings of OFZ bonds in February, as well as in Russian Eurobonds. The finance ministry told Reuters that more than half of the demand for OFZ bonds at two auctions last week had come from investors abroad.
The rouble is also seeing support from month-end tax payments that usually prompt export-focused companies to convert their foreign currency to meet local liabilities.
Russian stock indexes were mixed after having closed with gains last week.
The dollar-denominated RTS index was up 0.7 percent at 1,204.87 points. The rouble-based MOEX Russian index was down at 2,471.97 points.