Russian rouble steady following rate hold, Navalny death

MOSCOW, Feb 19 (Reuters) - The Russian rouble steadied near 92 against the dollar on Monday after a volatile start to the session, as markets settled after the central bank held rates at 16% on Friday and news about the death in prison of opposition politician Alexei Navalny.

The rouble recovered from dropping to mid-January lows at 93 to the dollar moments after Navalny's death was announced. Russian President Vladimir Putin's most prominent domestic foe, Navalny died at the Arctic prison where he was serving a three-decade prison term.

The Russian currency had also eased after the central bank held interest rates at 16% after months of tightening and issued a neutral signal on future policy.

At 0708 GMT, the rouble was 0.2% weaker against the dollar at 92.39 and had lost 0.5% to trade at 99.68 versus the euro. It had shed 0.7% against the yuan to 12.75.

With Chinese markets reopening after Lunar New Year holidays, fully fledged trading in the yuan has now resumed in Moscow, which could reduce general market volatility.

The Russian market observed an acute shortage of yuan during those holidays. The yuan has become the most traded foreign currency on Russia's FX market as sanctions have forced Moscow to seek alternatives to the dollar and euro.

The rouble has lost some support from foreign currency interventions this month as the state slightly reduced its daily FX sales.

Month-end tax payments usually support the currency as exporters convert foreign currency revenues to pay local liabilities, though some analysts say exporters now tend to spread their rouble purchases across the month, somewhat softening the tax period's impact.

"This week we can expect stronger support for the rouble from the approaching tax period, but we should not put much hope on this factor," said Alor Broker's Alexei Antonov.

Brent crude oil, a global benchmark for Russia's main export, was down 0.7% at $82.92 a barrel.

Russian stock indexes were higher.

The dollar-denominated RTS index was up 0.1% to 1,108.3 points. The rouble-based MOEX Russian index was 0.2% higher at 3,250.5 points. (Reporting by Alexander Marrow Editing by Bernadette Baum)