Economic news

Russia to restart FX interventions next month based on rainy day funds

2023.07.21 17:40


© Reuters. A customer hands over Russian rouble banknotes to a vendor at a market in Saint Petersburg, Russia July 9, 2023. REUTERS/Anton Vaganov/File photo

(Reuters) – Russia’s central bank said on Friday it would resume foreign exchange interventions based on its National Wealth Fund (NWF) investments from Aug. 1, in addition to mirroring the finance ministry’s operations within the budget rule framework.

It said the limit on such FX interventions was set at 300 billion roubles ($3.33 billion) per half-year to take into account the liquidity situation on the domestic foreign exchange market.

“Another bombshell from the central bank,” wrote CentroCreditBank Economist Yevgeny Suvorov on Telegram. Less than an hour earlier, the bank had hiked its key interest rate by a more-than-expected 100 basis points to 8.5%.

Under its budget rule, Russia is selling from the fund to make up for a shortfall in oil and gas revenue. It resumed those interventions in January after a hiatus of several months, shunning what it terms “unfriendly” Western currencies.

The central bank, in addition to carrying out those operations on the finance ministry’s behalf, said it would also carry out FX interventions related to NWF investments in rouble-denominated assets.

The daily volume of operations will be determining the balance of regular FX operations and investments from the NWF, Russia’s rainy-day fund, which accumulates energy revenue.

From January to June this year, the bank said the net volume of NWF funds invested in the relevant rouble assets had amounted to 288.4 billion roubles, meaning the daily volume of its operations from Aug. 1 to Jan. 31, 2024, would be 2.3 billion roubles.

The bank said it would buy or sell foreign currency evenly throughout the day to minimise the impact on the market.

The Bank of Russia has mirrored NWF investments in the past.

“Due to a number of circumstances, this was suspended,” Russian Central Bank Governor Elvira Nabiullina said on Friday. “We believe that now is the time to return to this practice. This is not aimed at influencing the rouble rate, it is really aimed at mirroring our operations.”

The move to operations in yuan illustrates the growing importance of China’s currency in Moscow’s efforts to ensure economic stability amid Western sanctions.

Nabiullina on Friday said around 1% of citizens’ deposits were held in yuan.

($1 = 90.1675 roubles)

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,096.28 0.27%
ethereum
Ethereum (ETH) $ 3,382.15 1.11%
tether
Tether (USDT) $ 1.00 0.06%
solana
Solana (SOL) $ 253.48 1.50%
bnb
BNB (BNB) $ 660.67 0.05%
xrp
XRP (XRP) $ 1.45 0.93%
dogecoin
Dogecoin (DOGE) $ 0.423124 3.40%
usd-coin
USDC (USDC) $ 1.00 0.07%
cardano
Cardano (ADA) $ 1.05 1.64%
staked-ether
Lido Staked Ether (STETH) $ 3,382.64 1.01%
tron
TRON (TRX) $ 0.209319 2.69%
avalanche-2
Avalanche (AVAX) $ 41.59 2.28%
stellar
Stellar (XLM) $ 0.531322 10.11%
the-open-network
Toncoin (TON) $ 6.11 4.80%
shiba-inu
Shiba Inu (SHIB) $ 0.000025 4.70%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,995.15 1.52%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,553.14 0.51%
polkadot
Polkadot (DOT) $ 8.88 2.97%
chainlink
Chainlink (LINK) $ 18.13 1.79%
bitcoin-cash
Bitcoin Cash (BCH) $ 511.76 1.18%
weth
WETH (WETH) $ 3,378.46 1.18%
sui
Sui (SUI) $ 3.41 1.61%
near
NEAR Protocol (NEAR) $ 7.08 9.56%
pepe
Pepe (PEPE) $ 0.00002 3.41%
leo-token
LEO Token (LEO) $ 8.64 0.08%
litecoin
Litecoin (LTC) $ 96.70 4.59%
aptos
Aptos (APT) $ 12.33 5.47%
uniswap
Uniswap (UNI) $ 10.91 0.68%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,556.91 1.39%
hedera-hashgraph
Hedera (HBAR) $ 0.142008 6.01%
internet-computer
Internet Computer (ICP) $ 11.36 3.89%
usds
USDS (USDS) $ 1.00 0.19%
crypto-com-chain
Cronos (CRO) $ 0.187198 5.33%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.56097 3.95%
ethereum-classic
Ethereum Classic (ETC) $ 28.66 4.84%
render-token
Render (RENDER) $ 8.02 0.98%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.50 0.69%
bittensor
Bittensor (TAO) $ 530.72 1.35%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.03%
kaspa
Kaspa (KAS) $ 0.152374 0.84%
whitebit
WhiteBIT Coin (WBT) $ 24.45 1.20%
arbitrum
Arbitrum (ARB) $ 0.852837 3.65%
dai
Dai (DAI) $ 1.00 0.09%
vechain
VeChain (VET) $ 0.042989 0.32%
bonk
Bonk (BONK) $ 0.000046 3.85%
blockstack
Stacks (STX) $ 2.28 7.79%
filecoin
Filecoin (FIL) $ 5.61 5.46%
okb
OKB (OKB) $ 56.31 4.24%
cosmos
Cosmos Hub (ATOM) $ 8.62 6.66%
mantra-dao
MANTRA (OM) $ 3.68 1.64%