The rouble strengthened on Wednesday, extending its recent gains and returning to levels achieved before Russia's "special operation" in Ukraine.

The rouble climbed 2 percent against the euro to 92.30, after briefly reaching 90.73, its highest level since February 23. According to Natalia Orlova, chief economist at Alfa Bank, the rouble is now driven by export-focused enterprises that are required to sell foreign currency, as well as month- and quarter-end tax payments that stimulate demand for roubles, while importers' activity is low.

The recent round of Russia-Ukraine talks in Istanbul, when the Russian side vowed to draw back military activities surrounding the Ukrainian capital of Kyiv, bolstered the rouble this week. The ruble is extending gains gained last week when Russian President Vladimir Putin ordered that natural gas sold to Europe or the United States be paid in rubles.

European countries, which purchase approximately 40 percent of their gas from Russia and pay largely in euros, claim that Gazprom, the state-controlled Russian gas behemoth, has no right to renegotiate contracts. This week, the G7 group of nations rejected Moscow's requests.

The RTS index, which is priced in dollars, increased 7.7 percent to 949.23 points, while the MOEX Russian index, which is denominated in roubles, increased 4.3 percent to 2,513.0 points. Aeroflot, Russia's flag carrier, has risen 24.7 percent since the reopening, making it one of the most volatile stocks since the reopening. Rosneft, Russia's largest oil company, rose 4.6 percent, while Sberbank, Russia's largest state lender, rose 4.5 percent.

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