(Reuters) – The Russian rouble jumped to a nearly two-year high against the dollar and euro on Wednesday. However, the European Union presented a new set of sanctions for Russia in response to events in Ukraine.

Ursula von der Leyen, President of the European Commission, proposed that Russia be placed under a gradual oil embargo. She also sanctioned Russia’s top bank and banned its broadcasters from European radiowaves. This was to further isolate Moscow.

After touching 68.6250 early trade, the rouble had risen 0.7% against the dollar to 70.49 GMT at 0721 GMT. This was its highest level since June 2020.

The euro had fallen 1.2%, trading at 73.84, compared to the dollar. It was earlier seen at 72.00, which is its highest point since February 2020.

Russian market movements are affected by capital controls that prop up the ruble. Meanwhile stocks trade with no short selling ban and foreigners are barred from buying shares in Russian companies.

After the Russian rouble fell to an all-time low, market participants are questioning whether the rate can be sustained in the light of these curbs. In March, the currency plunged to a new record low as Western countries hammered Moscow with unimaginable sanctions.

Russia’s friday last-minute payment of a dollar bond, an apparent maneuver to avoid default following previously promising to pay only in rubles. This helped ease some pressure on the assets.

Sberbank shares rose 0.3% following the European Commission’s proposal to remove Russia’s largest bank from international SWIFT transactions and messaging systems. This was in a further blow to the financial system of the EU in the wake of the Ukraine conflict.

Veles Capital analyst said the banks sanctions had been a bit harsh for the sector but were not critical.

Russian stock market indexes varied.

Dollar-denominated RTS Index was 1.2% higher at 1,094.8 Points. At 2,439.2 point, the MOEX Russian index, which is based on roubles was 0.2% less.

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