(Reuters] – On Friday the Russian rouble firmed, hovering close to the March 2020 peak against the Euro and strengthening beyond 72 against the Dollar, while markets waited on a potential rate reduction by the central banks.

Russian markets are partly controlled by capital controls. While stocks trade with no short-selling and are barred from selling shares without Russian permission, movements on Russia’s market are artificial.

The rouble, at 0749 GMT was 0.5% higher against the dollar (71.69) and the euro (75.40), close to the levels of two years ago.

In the last few days, the rouble strengthened as export-focused businesses sold foreign exchange revenue to cover local liabilities. These liabilities could be more than 3 trillion roubles ($43.26billion) according to Reuters survey analysts.

A Reuters poll suggests that the Bank of Russia may reduce its key rate by 200 basis point to 15% in an effort to increase lending.

At 1030 GMT the rate decision will be made. A media briefing with Governor Elvira Nabullina takes place at 1200 GMT.

While lower rates can support the economy with cheaper loans, they also tend to fan inflation and expose the rouble to external shocks.

The rouble is now back to pre-February 24, 2014, when Russia began what it describes as “a special militarisation” in Ukraine. It led to unimaginable western sanctions. These included a ban on Russia’s assets and an attempt to block Russian banks from accessing the global financial system.

Russian stock indexes were more high.

Dollar-denominated RTS was at 1,058.1 point, an increase of 1.6%. At 2,408.4 point, the MOEX Russian index, which is based on roubles was 1% more.

VTB Bank shares outperformed other markets, rising 2.3% after Kommersant reported that VTB Bank, the second largest lender in the country, may merge with Otkritie or RNCB.

Analysts at Promsvyazbank said that the decision would improve VTB Group’s performance, the share price and allow banks to optimize their branch networks.

For Russian equities guide see

Russian Treasury Bonds

($1 = 69.3488 roubles)