The rouble recovered on Monday due to stable oil prices, profit taking and local tax payments. However, market participants predict the currency’s volatility to continue in the midst of global financial issues.

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.”