* Rouble hits strongest level vs dollar since March 13
* 10-year government bond yields drop to 5.45%
* Markets buoyed by signs of recovery in oil demand (Adds detail, updates prices)
By Andrey Ostroukh
MOSCOW, May 18 (Reuters) - The Russian rouble rose to its strongest level against the dollar for more than two months on Monday while government bond yields hit record lows as the easing of lockdowns around the world drove oil prices higher.
The rouble was 1.2% up against the dollar at 72.70 at 1530 GMT after hitting 72.57, a level last seen on March 13.
The currency rose 0.7% versus the euro to 79.07, heading towards levels last seen in early March.
In the near term, the rouble is seen trading within a range of 72-74 versus the greenback, Sberbank Asset Management said in a weekly note.
The central bank’s daily sales of foreign currency have helped the rouble weather the increased global market volatility of the past few weeks.
Russian economic indicators are in focus this week after the commodity-dependent economy, which is poised to shrink this year, posted a budget and currency account surpluses for April.
“The stronger than expected current account, combined with active FX interventions and positive portfolio flows, suggests a decline in the near-term risks to the rouble,” ING said.
It said it was upgrading its range for the rouble in the second quarter to 73-78 against the dollar from 80-85.
Markets are awaiting April industrial production data due on Thursday to shed light on the depth of the economic contraction from the coronavirus outbreak and the recent oil price slump.
A Reuters poll of analysts forecast that industrial production would shrink 10% year-on-year in April, the first full month of Russia’s coronavirus-related lockdown.
Central Bank Governor Elvira Nabiullina gives her next online briefing on Friday and could spell out the bank’s monetary policy plans.
The central bank is widely expected to cut rates next month, which has kick-started a rally in Russian treasury bonds. Yields on 10-year OFZ bonds fell to 5.45% on Monday, down from 6.1% in late April.
Brent crude oil, a global benchmark for Russia’s main export, was up 8.9% at $35.38 barrel, supported by output cuts and signs of a gradual recovery in demand amid easing coronavirus lockdowns.
Russian stock indexes were up, with the dollar-denominated RTS index climbing 5.2% to 1,165.0 points. The rouble-based MOEX Russian index rose 3.6% to 2,687.9 points.
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Reporting by Andrey Ostroukh; Editing by David Clarke