Rouble climbs to highest since July vs dollar ahead of cenbank rate move



MOSCOW, June 11 (Reuters) - The Russian rouble firmed against the U.S. dollar to its highest since last July on Friday, buttressed by higher oil prices and expectations that the central bank will raise interest rates.

At 0738 GMT, the rouble was 0.2% stronger against the dollar at 71.65 RUBUTSTN=MCX , a level last seen on July 28.

Versus the euro, the rouble added 0.1% to 87.28 EURRUBTN=MCX .

The rouble gained this week after high inflation for May prompted a wide-scale revision of forecasts among economists who now, on average, expect the central bank to raise the key rate by 50 rather than 25 basis points on Friday.

"The CBR is on deck to deliver a rate decision, which appears set to be an aggressive 50-75bp hike," BCS Brokerage said.

"Investors will be focusing more on forward-looking hints in the statement and Governor's press conference," VTB Capital said.

The central bank decision is due at 1030 GMT and a media conference with its Governor Elvira Nabiullina is at 1200 GMT.

Higher rates support the rouble by making it more attractive for carry-trade operations in which investors borrow low-yielding currencies, such as the U.S. dollar, and convert them into roubles to buy high-yielding bonds.

The rouble, which took a hit from fears about new Western sanctions against Russia earlier this year, was on the mend in the past few weeks ahead of a meeting between U.S. President Joe Biden and Russia's Vladimir Putin due to take place on June 16.

This meeting is seen as a sign that more sanctions are not inevitable after the United States barred its banks from buying OFZ government bonds directly from Russia from mid-June.

Brent crude oil LCOc1 , a global benchmark for Russia's main export, was up 0.1% at $72.60 a barrel, heading for a third weekly rise on expectations of a recovery in fuel demand in Europe, China and the United States. .

Russian stock indexes were up.

The dollar-denominated RTS index .IRTS gained 0.8% to 1,690.1. The rouble-based MOEX Russian index .IMOEX was 0.4% higher at 3,843.6 points, near an all-time high of 3,847.89 it touched on Thursday.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM


Reporting by Andrey Ostroukh; Editing by Angus MacSwan

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