(Recasts with reaction to c.bank statement)
By Polina Nikolskaya and Andrey Ostroukh
MOSCOW, Sept 4 (Reuters) - The Russian rouble pared losses on Tuesday, gaining support from higher oil prices and comments from the central bank on the possibility of higher interest rates at a turbulent time for emerging markets.
Central bank Governor Elvira Nabiullina said on Tuesday she saw no grounds for a rate cut at the moment. Instead, she said, there were reasons for holding the key rate or even raising it as soon as next week in the wake of increased volatility on financial markets in Russia and abroad.
Following her remarks, the rouble firmed to 68.04 versus the dollar but soon weakened again, giving into pressure from concerns about global trade tensions and the risk of new U.S. sanctions against Russia.
Nabiullina is expected to shed more light on Russian monetary policy when she gives a speech at the International Monetary Fund headquarters in Washington on Thursday. But analysts have so far played down risks of an imminent rate rise.
“We would expect the central bank to tighten its rhetoric at the September 14 policy rate meeting; however, we would not expect a policy rate hike to take place earlier than the second quarter of 2019,” Alfa Bank analysts said.
The central bank’s hawkish stance pushed yields of Russian treasury bonds higher after they were already lifted by a sell-off in Russian state debt. Yields on 10-year benchmark OFZ bonds, which move inversely to prices, hit 8.84 percent for the first time since late 2016.
Versus the euro, the rouble gained 0.4 percent to 78.73 but traded well off levels of 73 in late July before the latest wave of fears about U.S. sanctions took hold.
“There will be weakness in the national currency until there is clarity about potential U.S. sanctions. That uncertainty could persist for one and a half to three months,” analysts at BCS brokerage said in a note.
New U.S. sanctions, tied to an attack on a former Russian double agent in Britain, could be imposed in the autumn.
The market is also awaiting a decision by the U.S. Congress in the autumn about draft legislation that includes restrictions on investment in new Russian sovereign debt and bans several state-run Russian banks from operating in the United States.
For Russian equities guide see
For Russian treasury bonds see (Reporting by Polina Nikolskaya and Andrey Ostroukh; editing by David Stamp)