The ruble is close to a two-week high before the decision on interest rates by the Central Bank of Russia

The Russian ruble stabilized on Friday, returning to the high of more than two weeks it had in the previous session with the support of capital controls, as the market expects the expected reduction of interest rates by the central bank, according to Reuters.

As of 10:24 Greek time, the ruble was 1.1% stronger against the dollar at 58.71, close to 57.4075 on Thursday, which was the strongest since May 25. It had gained 2.1% and was trading at 61.96 against the euro, also close to a two-week high.

The central bank is expected to cut interest rates, which in theory could put some downward pressure on the ruble and support OFZ government bond prices.

A majority of analysts polled by Reuters expect interest rates to fall by 100 basis points to 10% as the bank seeks to make lending more affordable amid sluggish consumer demand and declining inflation in May, although some have suggested that a sharper reduction to 9% is possible.

The decision on the interest rate is expected at approximately 13:30 Greek time, while the media will be informed by the bank’s governor Elvira Nabioulina.

The central bank’s decision is difficult to influence the ruble’s exchange rate, given the current restrictions on capital flows, said Alfa Capital analyst Alexander Dzhioev.

“However, it is worth noting that in conjunction with other factors, for example, the abolition of mandatory foreign exchange sales of profits by exporting companies, the currency could stop strengthening,” he said.

Capital controls forced exporters to convert 80% of their revenues into rubles after sending tens of thousands of troops from Russia to Ukraine on February 24. That ratio was later reduced to 50% in May.

Russian stock indices were mixed. The RTS index in dollar rose 1.1% to 1,226.7 points. The Russian ruble MOEX index moved 0.4% lower to 2,285.9 points.