Oil prices, the rouble's main driver, held above $77 per barrel thanks to improving risk appetite and fears of disruptions in oil and gas operations in the Gulf of Mexico during the hurricane season.

Against the dollar, the rouble firmed 3 kopecks to 30.34, after hitting its highest since May 18 of 30.28. Against the euro, it weakened 15 kopecks to 39.24.

Russian stocks also got a boost from the government's privatisation proposal. No change was recorded for the rouble after a draft plan was announced to sell $29 billion of state assets over the next three years.

Mikhail Spolokhov, chief dealer at MDM bank said, “We saw exporters selling foreign currencies in the morning and at the same time the demand (for dollars and euros) was evident, mostly from local banks.”

In a bid to meet domestic tax payments, Russia's export-focused companies usually step up conversion of their dollar and euro revenues in the second part of the month. According to Trust Bank estimates, Monday's tax on natural resources and excise duties could total 170 billion-190 billion roubles.

The Trust Bank added that, while the external backdrop remains positive for Russian assets, the rouble may be damaged by local demand for foreign currencies, especially for the cheap dollar.

Otkritie, one of Russia's largest brokers, has launched the platform, which allows investors to trade using 'direct market access' (DMA), a means for them to get access to the exchange by 'piggy-backing' on an exchange member’s system. Up until now traders have been forced to either make free-of-payment deliveries of stocks and cash before the trade was executed, or pay for broker financing.

It has been suggested that foreign investors prefer to use Micex for pricing as it is more liquid than RTS, Moscow’s other main exchange. While several billions of dollars a month are already traded by foreigners on Micex using Otkritie, it is assumed that trading will increase as a result of the new platform's transparency.

Roman Lokhov, head of global markets & investment banking at Otrkritie said, “Top tier one and tier two institutions say this is basically the exact platform they were looking for.”

Dimitri Kryukov, chief investment officer at Verno Investment Management, a Russia-focused fund, said, “Previously some deals were unable to get done on Micex because the securities were not available on the index. A platform that eliminates this problem is great for people like us.”

The announcement by Russia’s Prime Minister Vladimir Putin is part of an anti-crisis drive by the government.

Up to two billion roubles will be allocated to small innovation companies, while a further two billion roubles will go to small- and medium-sized business in company towns.

The remaining one billion will be used to support small and medium-sized companies in the North Caucasus.
Russia’s Minister of Economic Development Elvira Nabiullina said providing support to small- and medium-sized business was one of the priorities in the Russian government’s anti-crisis programme.

Up to 95 per cent of businesses in five Russian regions are attending the 2010 FinnTech and ToolTech forums this year – a Russian/Finnish trade show, showing further signs of recovery and development.

“Our economy is gradually getting out of the crisis and there are signs of recovery,” Nabiullina said.

The Russian government plan to make it easier for entrepreneurs to receive approvals and authorisations and to simplify customs and migration procedures. There is also a plan to introduce tax stimuli for investors.

“We hope that all these measures and work to improve the investment climate will systemic,” the minister said.

Finnish investments in Russia currently stand at one billion U.S. dollars.

After the weekend the rouble was down two kopecks to 34.57 when compared to the euro/dollar basket. Despite this, bank chiefs at ING Moscow say the rouble is in fact performing better than other currency choices of its kind.

It wasn’t only the Russian rouble that has suffered as a result of uncertainty in Europe. Profit taking on the euro, Australian dollar and South African rand has also been experienced in recent days.

External factors such as the cuts to the Greek credit rating on Monday added to the decreased demand.

Despite this, the rouble's main benchmark - oil prices - were relatively firm. With barrel prices currently at an estimate of $75 per barrel. This has not been enough so far to counteract the demand for foreign currencies in Russia.

"European problems prevail for now. But the rouble is doing better than other (commodity) currencies," said Alexei Borichev, dealer at ING bank in Moscow.

An upward swing may be on the cards with many predicting that impending domestic tax payments will offer some support to the currency in the coming days. This will see Russia's exporters converting part of their dollar and euro revenues to meet tax liabilities. Others argue that exporters are more likely to hold off for a lower, more attractive rouble rate.

The significant increase in quarterly profits are believed to be the result of cost cutting by Sberbank, and a fall in provisions against bad loans.

The net profits reported by the state-controlled bank of 43.5 billion roubles (£945m) are for the time period of January to March, up from 583 million roubles just a year previously.

There was also a noted and significant drop of 40.1 per cent to 54.3 billion roubles in the provision charge for loan impairment.

The news is seen as a positive turn for the Russian bank, previously dogged by announcements of future cuts and job losses. Cuts at one stage last year predicted a quarter of the Sberbank workforce would be culled by the year 2014.

Commenting on the quarterly figures, Sberbank reported that the drop was ‘backed by indications of economic recovery.’ It added that its profitability was now officially recovering.

Meanwhile, analyst Leonid Slipchenko at Uralsib Capital attributed the profits to the decision to offer lower provisions.

"The bank earned record-high profits due to lower provisions. Overdue loans grew insignificantly,” he said.

Effective from Tuesday, the benchmark refinancing rate in Russia will be cut by 25 basis points to a new low of 7.75 per cent. This brings the cumulative easing since April of last year to 525 basis points.

The central bank announced: "The parameters set … create the conditions for the formation of money market rates which will enable an acceptable balance between the affordability of borrowing funds and inflation risks." The statement went on to say: “Consequently, the Bank of Russia thinks it likely that the achieved level of interest rates will be maintained in the coming months."

Economic figures for April indicated signs of a stronger recovery from recession than up to now in the country. At the same time banks’ lending activity has increased and rouble appreciation has eased.

Along with oil prices, both the Russian stock market and the rouble have come under pressure in recent weeks.

However, Nikolai Podguzov, fixed income analyst at Renaissance Capital, commented that, "a weaker rouble is more of a boon for the Russian economy".

The central bank has said the new rate level should not cause significant capital inflow, and that the current volatility level of the rouble exchange rate is acceptable.

Against the euro-dollar basket, the rouble gained 41 kopecks on Monday to 34.78. Against the dollar, the rouble was up 13 kopecks to 31.05 and gained 73 kopecks to 38.45 against the weakened euro.

It has been reported that some Russian forex traders took the opportunity to lock in profit following the rouble’s heavy losses last week. A dealer at a major Western bank in Moscow said: "There were local banks closing long positions in the basket and some of them were taking new short positions."

The currency also strengthened in advance of domestic tax payments that are due to be made. Tax on natural resources is due on May 25th and income tax is due by May 28th, and both will amount to about 300 billion roubles.

Analysts expect, however, that the currency will demonstrate increased volatility in the short-term due to the global financial picture. But with oil prices stable at over $70 per barrel, a rapid loss in value is unlikely.

Anton Struchenevskiy, an analyst at Troika Dialog, commented: “We may see ongoing turbulence, the rouble may head to 35 (per basket). But I would not panic because of the increased volatility. It has nothing to do with the developments of 2008.”

Russia came out of recession in the third quarter, with a growth rate of 0.6 per cent, quarter-on-quarter. The rouble is currently standing at 37.6 against the euro.

The IMF cautioned, however, that generous liquidity support could be masking more serious underlying problems.

In the most recent statement on Russia they said that a tightening of monetary policy could prove problematic.

"We are concerned that, absent more forceful policy action, significant problems in the banking system could emerge once a normalisation of cyclical conditions forces the Central Bank of Russia (CBR) to tighten monetary policy," the IMF said.

The IMF advised the CBR to make use of the current stability to restore stringent regulatory requirements – chiefly through not extending the imminently expiring forbearance framework.

Higher spending in the 2009 and 2010 budgets has caused concern in the international finance body, leading to fears that the monetisation of large fiscal debts could put the rouble under pressure to weaken, stoking inflation.

The Russian currency rose 0.6 per cent against the euro to 38.6000. The movements left the rouble at 33.9686 against the central bank’s target currency basket, which is used to manage swings that could hurt Russian exporters.

The rouble remains within the 26 to 41 band the central bank pledged January 2009 to defend.

The International Monetary Fund warned, however, that Russia may have to implement capital controls to defend the economy against excessive capital inflows.

“Managing capital inflows is one of the key challenges facing the Russian authorities,” the IMF said in a report published on its website.

“All lines of defense against excessive inflows – macroeconomic and prudential policies as well as capital controls – should be considered.”

The rouble's climb was matched by surges in Russian stocks, also attributed to the joint EU/IMF 750bn euro (£650bn) loan guarantee deal.

The 30-stock Micex Index added 3.3 percent to 1,330.72 as of 1:05pm in Moscow after climbing as much as 4.2 percent – its biggest intraday gain since 11 January.

Stocks rebounded after falling 10 percent last week on concern Europe’s deficit crisis will slow the world’s economic recovery, damping demand for oil, Russia’s key export earner.

At 6.23 GMT the rouble had risen by 6 kopecks against the euro-dollar basket to 33.49, only 9 kopecks away from the current presumed Russian central bank floating currency boundary. The central bank monitors the rouble’s shifts within a floating corridor and moves it by 5 kopecks for every $700 million of interventions at each boundary. Last Tuesday dealers reported that the regulator had moved the corridor to 33.40-36.40 roubles per basket, the 32nd move since the middle of February.

As oil is one of Russia’s key exports, strong oil prices gave support to the currency. Futures for Brent crude oil were trading near the 19-month high reached on Monday.

It is expected that trading will be muted this week as many players continue their holiday in anticipation of another bank holiday weekend in Russia. Markets there will be closed on May 10.

A dealer at a Russian bank commented: "It is the beginning of the new month and anything can happen. We are likely to see a stronger rouble but the liquidity will be contracted as half of the traders are not at their work places."