Finance Ministry prepares draft decree to carry out FX auctions in dollars
MOSCOW. Oct 17 (Interfax) - The Russian Finance Ministry has prepared a draft decree allowing for forex deposit auctions to be carried out in the U.S. dollar.
The document was published on the official Internet portal of legal information.
Finance Minister Anton Siluanov said on Wednesday that the Finance Ministry would begin forex deposit auctions within a month to smooth out fluctuations in the ruble's exchange rate.
"Currently the Federal Treasury's accounts in foreign currencies opened at the Central Bank have a significant balance of temporarily free money, and the possibility has therefore arisen to place this [money] in foreign currency deposits at banks," a note on the document reads.
The Finance Ministry estimates that as of early October, federal budget funds of $3 billion could be could be offered to banks, the note says. This amount was previously discussed by the head of long-term strategic planning at the Finance Ministry, Maxim Oreshkin.
"Placing federal budget funds in bank deposits in foreign currencies will allow for liquidity to be supported in the entire Russian banking system, which is necessary under current conditions in order to maintain stability in how Russia's financial market functions," the ministry said.
Oreshkin told Interfax that the Finance Ministry might offer up to $3 billion in one or more foreign currency deposit auctions. Maturity will be one month or more.
The draft decree tasks the Finance Ministry with determining placement terms, including the timeframe for returning the deposit, as well as interest payments, the deposit interest rate, the list of banks, the maximum amount of funds placed with the banks, and the form of the bank deposit agreement.
