Russia Mulls Tying Reserve Fund Currency Purchases to Ruble Corridor Position

MOSCOW, April 4 (RIA Novosti/PRIME) – The Russian Ministry of Finance is considering connecting currency purchases for the country’s Reserve Fund to the position of the ruble within the currency’s euro-dollar trading corridor, Deputy Finance Minister Alexei Moiseyev told reporters Friday.

“There will be a tie to the exchange rate band and not a nominal exchange rate, but a peg to the spot exchange rates in the trading band ratio … The Ministry of Finance will stop purchases when under conditions that the ruble is in a specific position,” explained Moiseyev.

“Market turbulence would not be defined by our guesswork, but by specific and objective criteria,” said Moiseyev.

Moiseyev said the ministry could present a purchase schedule with the indication of the specific mechanisms of its market presence by next week.

“The system will be preserved under the baseline scenario. But if turbulence occurs, it will be changed. At least we think so but we have to work on that. The new mechanism will be a bit more complicated than just ‘yes’ or ‘no’,” Moiseyev noted.

The ministry has to replenish the Reserve Fund with 212 billion rubles ($6 billion). Since the beginning of the year, 38 billion rubles ($1.1 billion) have been spent on currency purchases. The ministry suspended such purchases March 4, due to the high volatility of the markets, triggered by the tensions around the situation in Ukraine and Crimea.     


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