The rouble firmed on Friday, pulling up from all-time lows hit in the previous session when Russia invaded Ukraine, while stock indexes rose sharply after their biggest one-day fall on record.

No Russian assets were left unscathed in heavy selling on Thursday. The fighting continued on Friday. read more

At 0722 GMT, the rouble gained 2.3% against the dollar to 83.30 , after hitting a record low of 89.60 in highly volatile trading the day before.

Against the euro, the rouble firmed 2.3% to trade at 93.49 , having hit an all-time low of 101.03 on the interbank market on Thursday.

The currency was supported by the first Russian central bank currency interventions since 2014, when Russia annexed Crimea from Ukraine. read more

The market expects more action from the central bank, which has to address inflationary risks. The weakening in the rouble after the Ukraine invasion is expected to dent living standards in Russia and fan inflation that is already close to 9%.

The central bank may now carry out an unplanned interest rate hike as it did in late 2014 when it raised its key rate to 17% from 10.5% late at night amid a plummeting rouble, analysts say.

“We think a prompt out-of-schedule 400bp or bigger hike by the CBR is likely with the key rate exceeding 13%,” Morgan Stanley said in a note.

Alor Brokerage said the central bank may hike the rate by 2-3 percentage points in the near future, aiming at keeping the rouble near 80 to the dollar and 90 to the euro.

The central bank, which targets inflation at 4%, had been expected to consider raising rates at its next board meeting on March 18.

The market is also digesting new harsh Western sanctions against Russia.

The moves stopped short of disconnecting Russia from the SWIFT international banking system or targeting its oil and gas exports, and Russia has spent the past seven years building up formidable financial defences.

But analysts said its economy is unlikely to withstand the onslaught of coordinated penalties from the West in the long run. read more

Russian stock indexes pared heavy losses after Thursday’s record one-day fall.

The dollar-denominated RTS index (.IRTS) soared 27.5% to 947.7. The rouble-based MOEX Russian index (.IMOEX) gained 22.5% to 2,520.9 points, heading away from its weakest level since early 2016 of 1,681.55 that it hit on Thursday. read more