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Rouble Hits 3-Week High vs Dollar as Cenbank Meeting Looms

MOSCOW, Dec 13 (Reuters) - The Russian rouble strengthened to a three-week high against the U.S. dollar on Monday, though the currency lacked the momentum to post bigger gains amid lingering political tensions between Moscow and the West.

The central bank is in focus this week as it meets to discuss interest rates on Friday, with analysts reviewing their rate hike forecasts to a more aggressive 100-basis-points rate rise as inflation hovers near its highest since early 2016.

At 0756 GMT, the rouble was flat at 73.39 against the dollar after touching 73.2475, its strongest level since Nov. 22. Versus the euro, the rouble eased 0.1% to 82.87.

"The rouble struggles to find grounds for a substantial firming due to increase speculative capital outflow amid geopolitical tensions," Raiffeisen Bank said in a note.

The rouble is excessively weak at current levels and may recover by early 2022 if no new penalties against Russia are imposed, Raiffeisen said.

Russia faces massive consequences and severe costs if President Vladimir Putin attacks Ukraine, the Group of Seven warned in a draft statement seen by Reuters on Sunday. 

U.S. intelligence assesses that Russia could be planning a multi-front offensive on Ukraine as early as next year, involving up to 175,000 troops. The Kremlin has dismissed such statements as fear-mongering.

Brent crude oil , a global benchmark for Russia's main export, was up 0.9% at $75.80 a barrel, clearing the way for stock indexes to recover after recent losses.

But Russian stock indexes nodded lower. The dollar-denominated RTS index shed 0.1% to 1,610.8 points. The rouble-based MOEX Russian index was 0.2% lower at 3,753.8 points.

"Russian shares on average remain cheap versus western peers but we do not see any obvious triggers for the price discount to shrink," said Michael Kart, a partner at VLG Capital investment firm.

"Russian stocks will remain a niche market and will account for an insignificant share in the global investors' portfolios in the foreseeable future."

Reporting by Andrey Ostroukh; Editing by Sherry Jacob-Phillips and Ed Osmond

Source: Reuters

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