Rouble recovers towards 77 vs dollar with eye on Russia-West talks

"The sanctions rhetoric continues and recent market gains are fragile, ready to break at a headline's notice," BCS Global Markets said in a note. The rouble is expected to average 75 versus the dollar in February, according to VTB Capital's revised model, which assumes a stable foreigners' share in Russian government bonds, oil prices at $90 per barrel and no increase in emerging markets risk premium.

The Russian rouble recovered towards 77 versus the dollar and stock indexes climbed higher on Tuesday, recovering further after a large-scale sell-off in January caused by increased tensions between Moscow and the West. At 0728 GMT, the rouble firmed 0.2% to 77.16 per dollar , its strongest since Jan. 24. Against the euro, the rouble gained 0.3% to 86.73.

The Russian currency sank to a near 15-month low of 80.4125 versus the greenback last week, battered by the tensions with Western powers who have threatened to slap fresh sanctions on Russia if it takes aggressive steps towards Ukraine. On Tuesday, the market will be watching for developments from phone conversations between Russian President Vladimir Putin and UK Prime Minister Boris Johnson.

Foreign Minister Sergei Lavrov is due to speak to U.S. Secretary of State Antony Blinken. "The sanctions rhetoric continues and recent market gains are fragile, ready to break at a headline's notice," BCS Global Markets said in a note.

The rouble is expected to average 75 versus the dollar in February, according to VTB Capital's revised model, which assumes a stable foreigners' share in Russian government bonds, oil prices at $90 per barrel and no increase in emerging markets risk premium. Brent crude oil, a global benchmark for Russia's main export, was flat at $89.28 a barrel, hovering near levels last seen in October 2014 and supporting Russian stock indexes.

The dollar-denominated RTS index rose 0.7% to 1,444.9 points. The rouble-based MOEX Russian index was 0.3% higher at 3,540.9 points, moving away from its lowest level since August 2020 of 3,158.46 it touched during the sell-off last month. For Russian equities guide see

For Russian treasury bonds see