Russian Central Bank sees no risks to financial stability in a weakening ruble

MOSCOW. Aug 11 (Interfax) - The Russian Central Bank still sees no risks to financial stability in the weakening of the ruble, but would like to reduce market volatility, so, it decided to suspend the mirroring of currency purchases by the Finance Ministry under the budget rule, Deputy CBR Chairman Alexei Zabotkin told reporters.

"Today, we do not see financial stability risks, but we would like to avoid a situation where we further increase market volatility with these operations; accordingly, we consider it possible to suspend them until the end of this year and then carry out these pending purchases after the resumption of regular operations in the same way as we did in 2019," Zabotkin said.

The Central Bank previously announced that from August 10 until the end of 2023 it will not purchase foreign currency on the domestic market to mirror the regular operations of the Finance Ministry related to the implementation of the budget rule. The regulator will continue to conduct transactions for the sale of foreign currency as part of its use of the funds from the National Wealth Fund (daily sale volume is 2.3 billion rubles).

The Russian Finance Ministry for the first time since February last year switched to buying foreign currency/gold under the budget rule. So, from August 7 to September 6, the daily volume of purchases was determined to be equivalent to 1.8 billion rubles. The total volume of purchases for this period is set at 40.5 billion rubles.

The euro and US dollar are actively strengthening on the MOEX on Friday afternoon. The latest data shows the euro above 109 rubles for the first time since March 23, 2022, and the dollar trading above 99 rubles for the first time since March 25, 2022.