Russian ministry starts buying foreign currency as ruble gains
By Bloomberg
Russia’s Finance Ministry said it started buying foreign currency several weeks ago to take advantage of this year’s ruble rally.
The ministry is buying foreign currency to cover this year’s foreign-currency expenditures, including debt payments, Deputy Finance Minister Alexey Moiseev told reporters in Moscow on Tuesday.
“From the point of view of managing our own spending, we clearly consider the ruble to be very strong,” Moiseev said. “That’s why we are trying to plan the purchases in advance.”
The Bank of Russia last week also started daily purchases of foreign currency to replenish reserves. The ruble is the world’s best performer this year after it plunged almost 50 percent in 2014 amid a slump in oil prices and sanctions over the conflict in Ukraine. The central bank canceled an auction of one-year foreign-currency repurchase agreements Monday, citing developments in the market.
“That’s another step to calm the ruble’s strengthening,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said by e-mail. “The government and the central bank are working as a team. We expect more steps to come.”
The ruble has gained 23 percent against the dollar this year. It weakened 0.5 percent to 49.3800 as of 12:24 p.m. in Moscow.
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