April 28 (Reuters) - The Russian rouble extended gains in early Moscow trade on Thursday, supported by month-end tax payments that led to increased conversion of foreign currency into roubles, while stock indexes posted solid gains.
Movements on the Russian market are partly artificial as the rouble is propped up by capital controls, while stocks are trading with a ban on short selling and with foreign players being barred from ditching shares in Russian companies without permission.
At 0737 GMT, the rouble was 0.3% stronger against the dollar at 72.59 after hitting 72 in light trade on the Moscow Exchange. Against the euro, it hit 74.3525, a level last seen in early March 2020 before retreating to trade 0.5% softer at 75.75 .
The Russian currency is expected to swing within the range of 71-73 to the greenback, Promsvyazbank analysts said in a note.
The rouble has firmed in the past few days as export-focused companies were selling their foreign exchange revenues to meet local liabilities that could exceed 3 trillion roubles ($41.24 billion) this month, according to analysts surveyed by Reuters.
The rouble has fully recovered to levels seen before Feb. 24, when Russia started what it calls "a special military operation" in Ukraine that led to unprecedented western sanctions, including a freeze on Russia's reserves.
On the bond market, yields on 10-year benchmark OFZ treasury bonds stabilised near 10.13% ahead of Friday's central bank rate-setting meeting.
The Bank of Russia is expected to cut its key interest rate by 200 basis points to 15% as it tries to stimulate more lending in the economy in the face of high inflation, a Reuters poll suggested earlier this week.
Russian stock indexes were up. The dollar-denominated RTS index rose 2.2% to 1.072.0 points, while its rouble-based peer MOEX was 1.9% higher at 2,470.7 points.
($1 = 72.7410 roubles)
Reporting by Reuters; Editing by Emelia Sithole-Matarise