The Russian rouble firmed past 74 to the dollar in Moscow trade on Friday, helped by companies prepa

The Russian rouble rallied past 73 to the dollar in Moscow trade before paring gains on Friday, helped by companies preparing to pay large sums in taxes, while government bonds prices rose further on expectations of a looming rate cut.

At 1244 GMT, the rouble was 1.2% stronger against the dollar at 73.90 after firming to 72.70. It had gained 1.4% to trade at 79.11 versus the euro on Moscow Exchange.

The rouble has fully recouped losses it suffered after Russia started what it calls “a special military operation” in Ukraine on Feb. 24.

The rouble is supported by a record 3 trillion roubles ($39 billion) that companies are due to pay in taxes this month, according to analysts surveyed by Reuters. To make the payments, some export-focused firms need to sell foreign currency.

“The main reason (for rouble gains) is still the same: strong supply of foreign currency from exporters ahead of next weeks tax payments and low demand for foreign currency amid restrictions on capital moves and its saturation after a commission to buy dollars was scrapped two weeks ago,” Sberbank CIB analysts said in a note.

Moves in the once free-floating rouble are somewhat artificial after Russia imposed capital controls to support the currency. On the interbank market, the rouble was weaker: banks offered to buy dollars for 75 roubles and were selling them for 80.

Central Bank Governor Elvira Nabiullina said Russia was looking at adjustments to its foreign exchange controls to avoid situations where the rouble exchange rate deviates on a shadow market from official levels.

As she begins her new five-year stint in charge of monetary policy, Nabiullina will have to deal with a full-scale economic crisis, tackling unprecedented uncertainty stemming from Western sanctions.

Nabiullina said on Thursday the central bank would consider cutting its key rate from 17% at upcoming rate meetings, which increased demand for OFZ government bonds, the prices of which move inversely with their yields.

Yields on 10-year benchmark OFZ bonds fell to 9.70%, their lowest since Feb. 18, from around 11.6% seen a week ago.

The central bank, which targets inflation at 4%, will hold its next rate-setting meeting April 29, where it will also present a new set of economic forecasts.

Economists polled by the central bank in April predicted inflation would accelerate to 22% this year, while the economy is set to shrink by 9.2% in 2022.

Russian stock indexes were down, lacking momentum and new trading ideas.

The dollar-denominated RTS index shed 0.8% to 954.1 points. The rouble-based MOEX Russian index fell 1.5% to 2,237.1 points.

($1 = 76.5000 roubles)

(Reporting by Reuters;Editing by Robert Birsel)