Russia to resume forex purchases after sanctions hiatus

Russia’s finance ministry said it is resuming foreign currency purchases on open markets after fears over US sanctions saw it halt them last year to head off a slide in the rouble rate.

Russia will spend Rbs265.8bn on the purchases between next Tuesday and February 6, the ministry said in a statement on Friday.

The purchases are the first since the central bank, which buys the forex for the finance ministry’s reserves, stopped them in August when a new sanctions bill in the US Senate saw the rouble devalue sharply. The finance ministry continued to buy them from the central bank’s own currency reserves.

Moscow has tried to reduce the rouble’s dependence on oil prices since 2017 with a budget rule that sees it spend extra revenue from a budgetary break-even price of $40 per barrel on reserves.

The Kremlin is also attempting to head off the effect of US sanctions by reducing its dollar reserves. The central bank moved $100bn into euros, renminbi, and yen in the second quarter of last year, halving its dollar reserves to a record low, according to data released this week.


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