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Russian central bank to halve daily FX buying in March - finance ministry
March 3, 2017 / 9:11 AM / 9 months ago

Russian central bank to halve daily FX buying in March - finance ministry

MOSCOW, March 3 (Reuters) - Russia’s central bank will nearly halve its daily purchases of foreign currency in March, the finance ministry said on Friday.

Russia resumed buying dollars and euros last month, part of an effort to replenish the country’s depleted reserves. It had not previously bought forex since 2015.

The finance ministry said the central bank would buy the equivalent of 3.2 billion roubles a day ($54.34 million) between March 7 and April 6 after purchasing around $106 million a day in February.

The reduction brings daily interventions below market expectations -- analysts on average predicted that the central bank would buy some $80 million a day.

The ministry said the central bank would buy the equivalent of 70.5 billion roubles between March 7 and April 6 and might increase its buying in future if market conditions remained unchanged.

The finance ministry says the purchases are aimed at shielding Russia from external shocks, but critics say they are an attempt to stop the rouble from strengthening too much.

A weaker rouble means revenues from oil exports earned in dollars translate into more roubles for the Russian budget, allowing Moscow to boost spending.

That is convenient for Russian authorities in the run-up to next year’s presidential election. President Vladimir Putin is widely expected to seek a new term, but has not yet confirmed if he will run or not.

People involved in top-level discussions on the forex purchases told Reuters the central bank wanted to distance itself from the interventions, fearing they would damage its credibility and cast doubt on the rouble’s free float. ($1 = 58.8897 roubles) (Reporting by Andrey Ostroukh; Editing by Andrew Osborn)

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