The Bank of Russia’s resumption of foreign exchange purchases has already been priced in by the market so these operations should not change the market’s balance, the head of the central bank’s monetary policy department Alexei Zabotkin has said, according to Rossiyskaya Gazeta.
The top central bank said in an interview with the newspaper that Russia’s strong current account in the first quarter and sufficient amount of foreign currency in the financial system should help offset the impact of the state’s FX purchases on the ruble.
“This would ensure sustaining the balance of supply and demand in pretty much the same way we see it now,” Zabotkin said, playing down market concerns about the resumption of regular FX purchases.
The central bank is set to resume FX buying for state reserves from Jan. 15, restoring daily downside pressure on the ruble that eased in late August when it halted these market operations amid increased ruble volatility.
Speaking about FX purchases that were put on hold last year but would have to be resumed at some point according to the Russian budget rule, Zabotkin said that will be “spread over several years.”
“We want to make sure that the resumption of forex purchases will not significantly affect the situation on the financial market,” Zabotkin said.“Further decisions on additional purchases will be made when we are confident that the market is comfortable.”
The central bank’s comments are in line with the Finance Ministry’s view. Minister Anton Siluanov said last month he did not expect significant ruble volatility in 2019 under his ministry’s baseline scenario.