This 2018 image shows an electronic board showing currency exchange rates of the US dollar against Russian rouble in Moscow, Russia on August 10, 2018. Currently, in March 2024, the exchange rate stands at: $1 = 91.2775 roubles.
Credit: Reuters File Photo
Moscow: Russia's finance ministry said on Tuesday that it would increase its purchases of foreign currency and gold in the month ahead, anticipating additional oil and gas revenues in March.
Due to other interventions the central bank is carrying out, the Russian state will continue making FX sales throughout March, just at a lower volume than in the previous month.
The finance ministry said its purchases of foreign currencies and gold for the period from March 7 to April 4 would amount to the equivalent of 93.7 billion roubles ($1.03 billion), or 4.7 billion roubles per day.
The ministry's currency interventions are carried out by the central bank. In August 2023, the central bank had deferred foreign currency purchases until the new year as this relieved the pressure on the rouble, which tumbled past 100 to the dollar in August and October.
The ministry was selling Chinese yuan for the first half of 2023 as Western sanctions imposed over Russia's actions in Ukraine hit energy revenues. It reverted to purchases in August as commodity prices rose and energy revenues recovered.
Under its budget rule, Russia sells foreign currency from its National Wealth Fund (NWF) to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus.
In the previous period, between February 7 and March 6, the ministry had planned to sell foreign currency worth 73.2 billion roubles.
Proceeds from oil and gas sales for Russia's federal budget jumped 40% in February from January to 945.6 billion roubles ($10.36 billion), ministry data showed, thanks to rising revenues from mineral extraction taxes.
In March, the ministry expects additional energy revenues for the budget of 125.2 billion roubles.
This year, the central bank's mirroring of finance ministry operations, including deferred foreign currency purchases from August to December, is being adjusted by the volume of NWF funds spent on financing the government's budget deficit for 2023 and supporting companies.
As a result, net currency sales in March will amount to 7.1 billion roubles a day, calculated Dmitry Polevoy of Astra Asset Management, predicting a limited impact on the rouble.