(Reuters) – The rouble strengthened sharply on Monday in volatile trading on Moscow Exchange, reversing last week’s large losses. It retained support from Russia’s strong trade accounts and capital controls.

As the central bank cut interest rates last week, the ruble plunged. This was a sign of more cuts. There was also the possibility of easing capital controls or a sovereign default, which added to downward pressure.

The rouble, which was 63.47 against the dollar at 0807 GMT GMT, was almost 5% higher than it was at the same time last Wednesday. It had reached 55.80 dollars last Wednesday, the highest level it has been since February 2018.

In comparison to the euro, it rose 6.6% to 65.40. Last Wednesday’s high was 57.10 for the seventh consecutive year. That is the peak in month-end taxes payments, which usually encourage export-oriented businesses to convert foreign currencies to cover liabilities.

Dmitry Polevoy of LockoInvest said, “The fundamental picture for the ruble isn’t changing much…. We are not ruling out the return to levels of 60 to63 to the dollars.”

Capital controls had helped the rouble rise to be the best performing currency in the world this year, until its slide last week. A new set of gas payment terms that requires conversion from foreign currencies to roubles for EU customers and an increase in imports support the rouble.

As Washington escalates pressure after what Russia refers to as a “specially military operation”, the market’s attention are on Russia’s ability and willingness to serve its foreign debt.

Russia intends to resolve its Eurobond obligations by using a scheme similar to the one used to pay for Russian Gas in Rupees, Anton Siluanov from Finance told Vedomosti daily.

Russian stock indexes varied.

Dollar-denominated RTS Index rose 4.2%, to 1,181.7 Points. Pressured by the recovery of the ruble, MOEX Russian’s rouble index fell 0.3% to 2,401.0 points.