The Russian rouble steadied on Monday, hovering near 97 to the dollar as the market took stock of Friday's rate rise to 13% and after the redemption of $3 billion worth of Russian Eurobonds over the weekend.
The Bank of Russia jacked up the cost of borrowing for the third meeting in succession on Friday in response to the weak rouble, which tumbled past 100 to the dollar last month, and other persistent inflationary pressures.
At 0745 GMT, the rouble was 0.2% weaker against the dollar at 96.97 and had lost 0.5% to trade at 103.43 versus the euro. It had shed 0.2% against the yuan to 13.28.
"The next couple of days may be decisive for the rouble," said Alor Broker analyst Alexei Antonov.
The central bank sharply increased its foreign currency sales for a week starting on Sept. 14, seeking to compensate for the planned redemption of $3 billion worth of Russian Eurobonds on Sept. 16.
The bank said it had expected some holders, who would be paid in roubles, to convert into foreign currency.
"Let's see what part of the funds received by domestic investors will again be directed to foreign currency," Antonov said, warning that the rouble returning to 100 against the dollar could not be excluded.
Brent crude oil, a global benchmark for Russia's main export rose 0.8% to $94.63 a barrel, a 10-month high, supporting Russian stock indexes.
The dollar-denominated RTS index was steady at 1,029.1 points. The rouble-based MOEX Russian index was 0.6% higher at 3,170.7 points.
"Despite the restrained optimism with which investors reacted to the regulator's (interest rate) decision, we suggest that with high rates, pauses in dividend payments and falling prices for rouble bonds, it is hard for the stock market to continue growing," said Sinara Investment Bank in a note. (Reporting by Alexander Marrow; Editing by Bernadette Baum)