(Reuters) – The Russian rouble strengthened against the dollar early Tuesday trade. Meanwhile, OFZ bonds prices rose to the highest level since February 21st on speculations that the central banks would cut interest rates.    The rouble, which was 0.6% higher against the dollar at 7:38 GMT on Tuesday morning, had fallen 0.2% to trade in the Euro at 83.97. This is after it briefly touched its highest level since Monday 8 April at 82.60.    Capital controls Russia implemented in February to limit the rouble’s movement in response to unprecedented west sanctions. Moscow sent tens of thousand troops to Ukraine on February 24, and the sanctions aim to penalize it.    Non-residents are prohibited from selling paper on the bond market since February 24th. The 10-year benchmark OFZ bond yields fell to 10.36%, down from 11.6% one week earlier. Their prices moved in inverse proportion to this.    Elvira Nabiullina, the Governor of Central Bank said on Monday that the central bank must work to improve the supply of credit for the country. It indicated it will consider reducing its key interest rate from 17% at its next board meeting on March 29.    Nabiullina said that Russia’s economy would be going through a period “of structural transformation” over the next two quarters. This, analysts believed, could mean a severe and fast economic contraction.    Evgeny Suprov, an economist with CentroCreditBank said that Russia could lose all its gains in the next two quarters. He predicted that the central banks would reduce their key rate from 15% to 15%.

    Russian stock indexes were down.    MOEX Russian’s rouble-based index dropped 1.4% at 2,310.3 points. It was the lowest level since February 25, when central banks suspended stock market trading.    RTS dropped by 1%, to 916.2.     For Russian equities guide see    For Russian treasury bonds see