The Russian rouble strengthened to a three-week high against the U.S. dollar on Monday, though the currency lacked the momentum to post bigger gains and stock indexes fell amid political tensions between Moscow and the West. The central bank is in focus as it is expected to raise interest rates on Friday by aggressive 100 basis points as inflation hovers near its highest since early 2016. read more At 1327 GMT, the rouble eased 0.1% to 73.44 against the dollar after touching 73.2475, its strongest level since Nov. 22. Versus the euro, the rouble shed 0.1% to 82.85 . "The rouble struggles to find grounds for a substantial firming due to increase speculative capital outflow amid geopolitical tensions," Raiffeisen Bank said in a note, adding that the rouble may recover by early 2022 if no new penalties against Russia are imposed. Russia faces massive consequences and severe costs if President Vladimir Putin attacks Ukraine, the Group of Seven warned in a draft statement seen by Reuters on Sunday. read more U.S. intelligence assesses that Russia could be planning a multi-front offensive on Ukraine as early as next year, involving up to 175,000 troops. The Kremlin has dismissed such statements as fear-mongering. "We expect the rouble to remain near current levels given that new catalysts have not yet emerged. Such a catalyst could come if talks between Russia and NATO are announced," Sberbank CIB said in a note. Brent crude oil , a global benchmark for Russia"s main export, was down 0.5% at $74.78 a barrel, putting extra pressure on stock indexes. The dollar-denominated RTS index (.IRTS)fell 2.1% to 1,578.8 points. The rouble-based MOEX Russian index (.IMOEX) was 2.2% lower at 3,678.3 points. "Russian shares on average remain cheap versus western peers but we do not see any obvious triggers for the price discount to shrink," said Michael Kart, a partner at VLG Capital investment firm. "Russian stocks will remain a niche market and will account for an insignificant share in the global investors" portfolios in the foreseeable future." Reporting by Andrey Ostroukh; Editing by Sherry Jacob-Phillips, Ed Osmond and Angus MacSwan Our Standards: The Thomson Reuters Trust Principles.