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UPDATE 1-Russian treasury could start buying FX without from 2018
March 14, 2017 / 3:58 PM / in 9 months

UPDATE 1-Russian treasury could start buying FX without from 2018

(Writes through with new detail, quotes)

By Darya Korsunskaya

MOSCOW, March 14 (Reuters) - Russia’s state treasury could start buying foreign currency on the domestic market without the help of the central bank from next year, the head of the treasury said on Tuesday.

The move would help distance the central bank from the foreign-currency purchases Russian authorities launched last month as part of efforts to protect the country’s fiscal reserves and keep the rouble from strengthening too far.

People involved in planning those purchases have told Reuters the central bank was nervous about being involved in helping to carry them out and has been at pains to convince investors they should not be equated with interventions.

The head of the treasury, Roman Artyukhin, told reporters on Tuesday that authorities were not rushing to grant the treasury the right to act independently of the central bank but that the latter supported the initiative.

“We understand that we can’t be a bull in a china shop with regard to monetary policy, which the Bank of Russia controls, and fiscal policy, which is the area of responsibility of the finance ministry, so of course we will carefully coordinate all steps with them,” said the deputy head of the treasury, Stanislav Prokofyev.

The treasury reports to the finance ministry.

Separately, Prokofyev said the treasury planned to use foreign-currency swaps to place its leftover foreign currency by September, since demand is not that great among banks for the forex deposits it currently offers.

Russia could offer between $0.5 billion and $1 billion out of the $2 billion-$4 billion it typically keeps in reserve in foreign currency on its treasury accounts, he said. (Writing by Alexander Winning; Editing by Katya Golubkova and Gareth Jones)

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