Currency sales under fiscal rule will nearly triple as of Feb 7 amid rise in revenue shortfall - Finance Ministry

MOSCOW. Feb 3 (Interfax) - The Russian Finance Ministry from February 7 to March 6 plans to allocate funds totaling 160.2 billion rubles for the sale of foreign currency under the fiscal rule, with the daily volume of sales to be equivalent to 8.9 billion rubles, the ministry said in a statement.

The current daily volume of sales is 3.2 billion rubles from January 13 to February 6, implying that the volume will surge nearly three-fold in February.

The Finance Ministry in February expects a shortfall of 108 billion rubles in oil and gas revenues remitted to the federal budget. The forecasted shortfall for January was estimated at 54.5 billion rubles.

The shortfall in oil and gas revenues remitted to the budget in January actually totaled 52.1 billion rubles.

The purchase/sale of foreign currency in the fiscal rule framework resumed on January 13 after they were put on hold at the end of January last year. The Finance Ministry and Central Bank said at the start of this year that operations would be carried out on the Moscow Exchange currency section with the "Chinese yuan - ruble" instrument with tomorrow settlement (CNYRUB_TOM).

The Bank of Russia does not yet see these operations affecting the yuan exchange rate in Russia. "Is it possible that the yuan's rate against the dollar calculated via a cross-rate from the Russian exchange will differ from the international rate? Or the yuan against the euro? That is the question. We are hardly seeing this at all in practice. There are times when the rates differ slightly, but the differences are not usually significant - 1% at most, maybe a little more. In a normal situation, the difference is usually smaller and close to zero," Ksenia Yudaeva, First Deputy Governor of the Bank of Russia, said in an interview with Tinkoff Private Talks, when asked whether operations under the fiscal rule might affect the yuan exchange rate in Russia.

She said this was happening because the yuan market was already very big, "something like 40% of trading is now in yuan, on some days even more - almost 50% of the market." "This really is a fairly liquid market, so such transactions cannot by themselves cause large fluctuations," Yudaeva said. In addition, there are market participants who make money by equalizing the exchange rates of different currencies to the ruble, and this stabilizes the market. "So I don't see any significant risks," she said.