🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Russia's net FX interventions to be near zero in April

Published 04/03/2024, 07:07 AM
Updated 04/03/2024, 07:11 AM
© Reuters. FILE PHOTO: Russian 1000-rouble banknotes are seen inside a currency counting machine in a bank office in Moscow, Russia, in this illustration picture taken October 9, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo
USD/CNY
-

MOSCOW (Reuters) - Russia's finance ministry said on Wednesday it would more than double its purchases of foreign currency and gold in the month ahead, a move that combined with central bank selling will bring the state's net forex interventions overall close to zero.

The finance ministry said it would buy the equivalent of 235.3 billion roubles ($2.6 billion), or 11.2 billion roubles per day, of foreign currency and gold from April 5 to May 7.

The central bank conducts forex interventions on the finance ministry's behalf. Meanwhile, the central bank is also selling forex to compensate for money spent from Russia's rainy-day wealth fund in 2023.

As a result, the Russian state overall will remain a net forex seller in April - just at a much lower volume than in the previous month, with overall sales diving to 0.6 billion roubles from 7.1 billion roubles a day.

In the March 7-April 4 period, the ministry had planned to buy foreign currency worth 93.7 billion roubles, while analysts surveyed by Reuters had predicted purchases totalling 117.5 billion roubles.

Under its own budget rule, Russia sells foreign currency from its National Wealth Fund to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus. The ministry said it was increasing its purchases in part thanks to higher than expected income tax receipts.

Proceeds from oil and gas sales for Russia's federal budget rose to 1.3 trillion roubles in March from 945.6 billion roubles in February, ministry data showed.

In April, the ministry expects additional energy revenues for the budget of 128.3 billion roubles above its current plan.

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

The central bank deferred foreign currency purchases last August to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and October.

© Reuters. FILE PHOTO: Russian 1000-rouble banknotes are seen inside a currency counting machine in a bank office in Moscow, Russia, in this illustration picture taken October 9, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo

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.

($1 = 92.4050 roubles)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.