Ministry says ruble too cheap to buy currency for Reserve Fund now

MOSCOW, Mar 12 (PRIME) -- The current exchange rate exceeding 36 rubles per U.S. dollar is unacceptable for resuming currency purchases for the Reserve Fund, Deputy Finance Minister Alexei Moiseyev told reporters Wednesday.

“Frankly speaking we believe that the rate is still too high. We have no desire to buy (foreign currency) in a hurry at the rate of 36 rubles (per dollar),” Moiseyev said.

The ministry suspended foreign currency purchases for the Reserve Fund, which protects the budget against falls in oil prices, on March 4 due to higher volatility on the financial markets.

The ministry started buying 3.5 billion rubles worth of currency per day from the central bank on February 20 to transfer 212 billion rubles of additional oil and gas revenue for 2013 to the fund, and planned to stop purchases at end of May. The ministry has bought foreign currency for 38 billion rubles so far.

Moiseyev also said that the ministry wants to change the procedure of currency purchases for the Reserve Fund to make it more flexible.

“We are thoroughly looking at the situation. I think we will wait a couple of weeks and return to this issue,” he said.

The ministry has proposed to allow the finance minister to immediately suspend and resume such purchases depending on the situation, Moiseyev said.

The ruble has fallen around 9% against the dollar since the start of this year, partly driven by fears across emerging markets about the impact of U.S. quantitative easing (QE) program tapering, as well as local concerns about slow economic growth, weakening current account surplus, and the escalation of political tension in Ukraine.

(36.4015 rubles – U.S. $1)

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