On Monday, the Russian Ruble bounced back against the euro and the US in Moscow trading, after it had reached lows of three weeks.
This was because of strong fundamentals and the end of a tax period that had turned out to be favorable. In addition, oil prices also buffeted the Russian currency.
There was a 2% rise in the Russian ruble against the US dollar by 1418 GMT, which saw it reach 60.42. The currency had earlier reached its weakest point at 62.4875 on July 7th.
As far as the euro is concerned, the ruble rose by 1.1% to reach a value of 61.78. According to analysts, the fundamentals of the Russian currency have remained quite strong.
They noted that supply from exporters had not been outweighed by foreign currency demand from the population and importers.
Last week, some of the losses stemmed because of a surplus in the current account and high prices of oil. However, there was still a loss of 7% in the ruble against the US dollar.
Analysts had noted that the steady weakening in the ruble had been because of the end of the dividend and tax period.
The ruble had seen some upside pressure come down because the tax payment period had come to an end in the previous week. This is when exporting companies usually pay their local liabilities after converting their revenues generated into foreign currency.
In addition, last month has seen the Russian central bank reduce its interest rate to 8% and it also hinted at more cuts in the future, which had helped in reducing some of the upside pressure on the currency.
Analysts said that there was a possibility that the ruble could come down to 63 to 65 against the US dollar.
According to experts, the primary reason behind the swings in the Russian ruble on Monday was because of speculation about the central bank considering the possibility of further sanctions.
There is a chance that the sanctions could now hit the Moscow Exchange and this would result in the fall in dollar and euro exchange trading.
While the first response to such news is to purchase foreign currency, but the demand for forex had faded by afternoon.
On Friday, the central bank dictated that it had been discussing various scenarios of sanctions with participants in the forex market.
This was after it had been reported that the Russian central bank was considering a mechanism for managing the exchange rate between the US dollar and the ruble.
There was a discussion about the mechanism in the event that sanctions against the National Clearing Center and Moscow Exchange put a stop to exchange trading.
There is also anticipation that the budget rule in Russia would soon be re-introduced after some tweaking, which is meant to divert the extra oil revenues into a separate fund.
A mixed response was seen in the Russian stock indexes, with the MOEX index declining by 0.9% and the RTS index climbing by 1.4%.