Central Bank of Russia sees no risk to financial stability from currency market situation, no need to bring back mandatory FX sales by exporters
ST. PETERSBURG. July 4 (Interfax) - The currency market situation poses no additional risks to financial stability, and there is no need to bring back the mandatory sale of foreign exchange earnings by exporters, Central Bank of Russia First Deputy Governor Ksenia Yudaeva told reporters in St. Petersburg.
"We don't see any irregularities on either side in what's been taking place lately, at any rate not on any of the previous days: there are both sellers and buyers, we see that there are no exchange rate discrepancies between different markets, that is there is arbitrage between different markets, there is liquidity within the market, and there's no need to talk about any kind of additional financial stability risks on top those we have had all this time," she said.
The balance of payments is still the main factor behind the ruble's exchange rate. The current account surplus is narrowing considerably this year due to a reduction in export earnings against the backdrop of lower commodity prices, Yudaeva said. "The surplus is decreasing - this is, of course, the main factor. Yes, there can be a time lag before it has its effect," she said.
"The current account surplus has narrowed a lot. If the surplus shrinks the ruble will be cheaper," she said.
Yudaeva said no major transactions to upset the currency market were evident.
"I mean big deals that affect the rate, one-offs - it shifts one day and recovers the next. I can't say we've seen much if that on the market," she said.
But tax periods have started to have more of an impact. "There are companies that have taxable revenues, and evidently there is less arbitrage within a month for those who take risks to buy up during the tax period, then gradually sell, so tax periods have become a little more prominent. But in general, I wouldn't say that deals are being done that are upsetting things to any great extent," Yudaeva said.
She said risk to financial stability arise not when the exchange rate reaches a certain level, but when the way the market operates changes, the environment for deals, when liquidity tightens and so on.
The Central Bank sees no need to bring back the mandatory sale of foreign exchange earnings by exporters.
"The market's structure has changed. New oil traders are also playing quite a big role in our country, so I don't see why we should bring back the mandatory sale of foreign exchange earnings. We introduced this last year when there was a major shock," she said.