Russia's finance ministry to switch back to FX purchases in month ahead

Reuters

Russia's finance ministry to switch back to FX purchases in month ahead

2024 2월 5 일, 오전 9:21 GMT

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MOSCOW, Feb 5 (Reuters) -Russia's finance ministry said on Monday it would revert to making purchases of foreign currency in the month ahead, anticipating additional oil and gas revenues in February.

Due to other interventions the central bank is carrying out, the finance ministry's switch ultimately means that the Russian state will continue making FX sales throughout February, just at a lower volume than in the previous month.

The finance ministry said its purchases of foreign currencies and gold for the period from Feb. 7 to March 6 would amount to the equivalent of 73.2 billion roubles ($800.7 million), or 3.7 billion roubles per day.

A survey of seven analysts polled by Reuters last week predicted that the finance ministry would make purchases totalling 15 billion roubles.

The finance ministry's currency interventions are carried out by the central bank. In August 2023, the central bank deferred foreign currency purchases until the new year as it stopped them to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and October.

The ministry was selling Chinese yuan for the first half of 2023 as Western sanctions imposed over Russia's actions in Ukraine hit energy revenues. It reverted to purchases in August as commodity prices rose and energy revenues recovered.

Under its budget rule, Russia sells foreign currency from its National Wealth Fund (NWF) to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus.

Russia's January energy revenues were 122.2 billion roubles higher than the ministry had expected, it said. In February, Russia expects additional energy revenues for the budget of 195.4 billion roubles.

In the previous period, between Jan. 15 and Feb. 6, the ministry had planned to sell foreign currency worth 69.1 billion roubles.

This year, the central bank's mirroring of finance ministry operations, including the deferred foreign currency purchases from August to December, is being adjusted by the volume of NWF funds spent on financing the government's budget deficit for 2023 and supporting companies.

According to a central bank statement in late December, overall operations are set to be adjusted by separate daily yuan sales worth 11.8 billion roubles from February to June 28.

Taking that NWF spending and adding sales into account, the central bank will ultimately make net forex sales of 8.1 billion roubles a day, according to Reuters calculations.

($1 = 91.4200 roubles)

Reporting by Alexander Marrow and Darya Korsunskaya; Editing by Alex Richardson and Bernadette Baum

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