MOSCOW: Russia's Finance Ministry said on Tuesday it will increase purchases of foreign currency and gold over the next month in anticipation of higher oil and gas revenues in March.
Due to other interventions carried out by the central bank, the Russian state will continue to sell foreign exchange throughout March, but only in lower volumes than in the previous month.
The Ministry of Finance announced that foreign currency and gold purchases from March 7 to April 4 amounted to 93.7 billion rubles ($1.03 billion), or 4.7 billion rubles per day.
The ministry's foreign exchange interventions are carried out by the central bank. In August 2023, the central bank postponed foreign currency purchases until the new year as pressure on the ruble, which had fallen by more than 100 rubles to the dollar in August and October, eased.
The ministry had sold yuan for the first half of 2023 as Western sanctions over Russia's actions in Ukraine hit energy revenues. They returned to purchasing in August as commodity prices rose and energy incomes recovered.
Under its budget provisions, Russia will either sell foreign currency from the National Wealth Fund (NWF) or buy it in the event of a surplus to make up for the shortfall in revenue from oil and gas exports.
In the previous period from February 7 to March 6, the ministry planned to sell foreign currency worth 73.2 billion rubles.
Oil and gas sales revenue in the Russian federal budget rose 40% from January to 945.6 billion rubles ($10.36 billion) in February, thanks to an increase in mineral extraction tax revenue, according to ministry data.
The ministry expects additional energy revenues to the budget of 125.2 billion rubles in March.
The central bank's reflection on the Treasury's operations this year, including the deferral of foreign currency purchases from August to December, will be adjusted by the amount of NWF funds spent on financing the government's budget deficit and supporting businesses in 2023. .
As a result, Astra Asset Management's Dmitry Porevoy estimates that net currency sales will reach 7.1 billion rubles per day in March, and the impact on the ruble will be limited.
(issued March 5, 2024, 10:28am IST)
