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UPDATE 1-Russia's reserves could rise by $23 bln this year - c.bank head
March 24, 2017 / 2:55 PM / 7 months ago

UPDATE 1-Russia's reserves could rise by $23 bln this year - c.bank head

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By Alexander Winning and Andrey Ostroukh

MOSCOW, March 24 (Reuters) - Russia’s gold and foreign currency reserves could rise by $23 billion this year, the head of the central bank said on Friday, improving the country’s resilience against external shocks.

Elvira Nabiullina, central bank governor, told reporters Russia’s reserves would rise thanks to state foreign currency purchases for the country’s fiscal reserves and banks returning dollars they had taken in forex repo operations.

Russia’s reserves were at around $396 billion as of mid-March, their highest level since November 2016.

The central bank has previously said it wants to have around $500 billion in reserves, and Nabiullina repeated on Friday that increasing the reserves was a strategic aim for the bank.

Russia last had $500 billion in reserves in January 2014, before the Ukraine crisis escalated and oil prices collapsed, forcing the central bank to stage a massive defence of the rouble.

“We will take a decision on increasing our gold and forex reserves when there won’t be risks that we will miss our 4 percent inflation target,” Nabiullina said after the bank cut its main lending rate by 25 basis points to 9.75 percent.

The central bank signalled on Friday that it would gradually ease policy further as inflation slows.

Nabiullina also said banks could completely pay back this year the debts they had accumulated in forex repo operations and that she did not see factors which could lead the central bank to abandon its free-floating exchange rate. (Editing by Katya Golubkova)

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