Despite strong oil prices, the rouble's recent gains are being trimmed back due to concerns over the country's persistent heat wave and drought.

International investor fears rose and risk aversion grew as they worried about the weather's impact on economic activity.

According to dealers, Russia's forex market is extremely concerned about the impact of the heat wave, which has caused major fires and forced many people out of Moscow, Russia's main financial centre.

Investors are more likely to ditch roubles for 'safer' assets such as dollars or euros in light of the uncertain environment in Russia at the moment. As a result of the droughts, Russian authorities have imposed a ban on grain exports while market prices for wheat surged towards a two-year high.

A dealer at a major Russian bank in Moscow said, “It's odd to keep long positions in the currency of the country where … harvest forecasts are being revised every day.”

However, in the long run, some dealer feel that the extreme weather could actually help to benefit the rouble, as long as it doesn't hurt economic growth too much.

The drought could limit farm production, sparking a rise in consumer prices which the central bank may well cap by reducing its currency interventions – thus enabling the rouble to firm further.