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Russian finance ministry to increase deferred FX purchases in November

Published 11/03/2023, 05:19 AM
Updated 11/03/2023, 05:21 AM
© Reuters. FILE PHOTO: A view shows a Russian one rouble coin in front of a screen in this illustration picture taken August 22, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo
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(Reuters) - Russia's finance ministry said on Friday it would increase the volume of deferred foreign currency purchases in the coming month to a cumulative total of 621.1 billion roubles ($6.70 billion).

The purchases, in line with Russia's budget rule, will be deferred because the central bank in August stopped buying foreign currency until the end of the year to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and September.

The finance ministry said its purchases of foreign currencies and gold for the period from Nov. 8 to Dec. 6 that will be deferred to a later date would amount to 29.6 billion roubles per day.

Analysts surveyed by Reuters had predicted purchases would total 450 billion roubles.

In the previous period, between Oct. 6 and Nov. 7, the ministry had planned to buy foreign currency worth 398.7 billion roubles to compensate for lower oil and gas revenues.

The central bank has said it will decide when to resume buying foreign exchange based on market conditions, and that purchases postponed during 2023 may be made in 2024 and subsequent years.

Under its budget rule, Russia sells foreign currency from its wealth fund to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus.

Increased purchases mean the finance ministry expects energy revenues to be above plan. It estimated excess oil and gas revenues in November at 583.3 billion roubles.

© Reuters. FILE PHOTO: A view shows a Russian one rouble coin in front of a screen in this illustration picture taken August 22, 2023. REUTERS/Maxim Shemetov/Illustration/File Photo

The ministry was selling foreign currency for the first half of 2023 as Western sanctions over Russia's invasion of Ukraine hit energy revenues. Since August, it has sold FX as commodity prices have risen and energy revenues recovered.

($1 = 92.7200 roubles)

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