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UPDATE 1-Russian finmin starts saving forex to meet non-rouble liabilities
March 3, 2017 / 12:52 PM / 9 months ago

UPDATE 1-Russian finmin starts saving forex to meet non-rouble liabilities

* Cenbank is already buying FX for finmin

* To halve purchases this month to $54 mln/day

* Finmin starts to set aside forex this month separately

* Forex to be used to meet budget external obligations (Adds details, quotes, background)

By Darya Korsunskaya and Elena Fabrichnaya

MOSCOW, March 3 (Reuters) - Russia’s finance ministry started saving foreign currency this month to meet non-rouble budget liabilities, Finance Minister Anton Siluanov said on Friday.

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

The central bank buys currency on behalf of the finance ministry, which, in turn, has said it will be used to rebuild the Reserve Fund, one of two Russian sovereign wealth funds.

“The rouble rate is attractive now from the point of view of meeting budget liabilities in foreign currency. So since the start of March, we have started to accumulate forex liquidity in treasury accounts,” Siluanov said on Friday.

Siluanov did not say how much the finance ministry had already set aside and which tool it was using to get the foreign currency. The Russian budget receives revenues in roubles.

“These are funds which we need to meet the budget’s current liabilities in forex in 2017,” Siluanov said. He did not provide other details and the finance ministry declined additional comments.

A source close to the finance ministry said that the foreign currency accumulation and the central bank purchases were separate. The ministry was setting apart forex liquidity to meet the budget’s external obligations in the past as well, he said.

The source added that the ministry, which oversees the rouble-denominated budget, needs foreign currency to make external debt repayments, as well contributions to international organisations of which Russia is a member.

“Technically, the treasury is writing up a letter to the central bank, saying how much forex it needs. The central bank will decide on its own whether to buy this forex on the market or make an internal conversion,” the source said.

The central bank did not immediately reply to Reuters’ request seeking a comment.

Separately, the ministry said on Friday that the central bank will nearly halve its daily forex purchases in March, buying the equivalent of 3.2 billion roubles a day ($54.3 million) after purchasing around $106 million a day in Feb.

The rouble was slightly up after the ministry announced the reduction of daily forex purchases, to trade at 58.85 versus the U.S. dollar at 1208 GMT, down 0.08 percent. (Writing by Andrey Ostroukh/Katya Golubkova; Editing by)

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