Finance Ministry halts foreign currency purchases for Reserve Fund
MOSCOW. June 25 (Interfax) - The Russia Finance Ministry has stopped purchasing foreign currency to replenish the Reserve Fund, the Central Bank said on its website.
The foreign currency is supplied out of the Central Bank's daily purchases on the domestic currency market. The Central Bank last purchased foreign currency on behalf of the Finance Ministry and of its subordinate authority, the Federal Treasury, on June 23. No purchases were made on June 24.
The Finance Ministry resumed foreign currency purchases on April 14, after suspending them on March 4 due to the recent heightened volatility in the financial markets.
In the period from February 20 to the end of May, the ministry planned to purchase the equivalent of 3.5 billion rubles in forex per day. In total, the ministry planned to buy 212.2 billion rubles worth of forex, but had purchased just 38 billion rubles when the purchases were suspended in March.
According to Central bank data, a total of $4.77 billion has been purchased for the Treasury since April 14. Including the $978 million purchased in late February and the beginning of March, the total is $5.748 billion.
The Central Bank's net currency interventions are adjusted up or down by the amount of forex to be transferred to the Treasury.
The standard daily forex purchasing volume had been about $100 million (3.5 billion rubles). That changed on April 10, when the Finance Ministry said it would buy the equivalent of 3.5 billion rubles a day but would act depending on the market situation and that purchases could be scaled down to the equivalent of 1.75 billion rubles a day depending on the bi-currency basket's value if the value of the basket reaches the upper range of the operational band; the purchases are to halt if the currency basket rises above the border of the upper range.
Purchases equivalent to 1.75 billion rubles a day will resume if the basket's value returns to the operational band's upper range for five consecutive trading days and will rise to 3.5 billion rubles a day if the basket drops below the upper range for three consecutive trading days.
A suspension in purchases occurs on the second trading day, while a resumption occurs on the third trading day after the conditions for a resumption are met.
