Fin ministry to buy 426.9 bln rbl foreign currency Fri–Oct 4

MOSCOW, Sep 5 (PRIME) -- Russia’s Finance Ministry will acquire 426.9 billion rubles of foreign currency from Friday through October 4, spending 21.3 billion rubles a day, the ministry said in a statement on Wednesday.

“Windfall income of the federal budget from oil and gas sales is projected at 391.4 billion rubles in September 2018 thanks to the effective crude price overshooting the basis forecast level,” the ministry said and added that the income will surpass the projected level by 35.4 billion rubles.

“Considering the central bank’s decision to withdraw from foreign currency purchases on the internal market under the budget rule mechanism, the funds will be… bought by the Federal Treasury from the central bank without corresponding purchases from the internal currency market.”

The central bank bought almost no currency on the open market in August and said it would not resume the purchases at least until the end of September to “raise predictability of the monetary authorities’ actions and to reduce volatility of the financial market.”

The Russian ruble dropped around 10% against the U.S. dollar in August after the U. S. announced fresh sanctions against Russia for its alleged involvement in the Skripal family poisoning case in the U.K.

The Finance Ministry also said is it unable to adjust the budget rule which envisages using windfall oil and gas revenue from the oil price of above $40 per barrel to replenish the government’s reserves. It added that the central bank has a variety of tools to reduce market volatility including higher or lower volumes of currency purchases from the open market.

In February 2017, the ministry said it entered the currency market to minimize dependence of the ruble rate on oil prices. The ministry assured the influence on the ruble quotations would be minimal.

(68.2737 rubles – U.S. $1)

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