Russian Central bank buys dollars

Russian Central bank buys dollars

Russia's Central Bank has started regular purchases of US dollars, buying $100 million to $200 million daily starting on May 13. "This decision was made taking into account the normalization of the situation in the domestic foreign exchange market and is not aimed at maintaining a certain level of exchange rate," the Central Bank of Russia said.


"The purchases will be carried out uniformly throughout the trading day to minimize the impact on the exchange rate. In the case of significant changes on the foreign exchange market, the amount of transactions can be changed," the Central Bank said.The associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, told Vestnik Kavkaza that the ruble will be under slight pressure. "This decision of the Central Bank has shown that such a strong ruble prevents it. Apparently it wants to bring down the rate of the ruble, so it has made such a decision. Any purchase is pushing the price up. Therefore, the purchase of the dollar means that the price for it will grow," he stressed.According to the expert, the decision of the Central Bank to buy foreign currency testifies that it needs a cheaper ruble, to help the Ministry of Finance in solving budgetary and other issues.The analyst pointed out that there is no risk of a sharp collapse of the ruble, as the main risk is primarily linked to oil prices. He said that the Central Bank's need to replenish the foreign exchange reserves is high now.A leading researcher at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economics and Public Administration, Alexander Abramov, for his part, noted that the purchase of $1 billion per week will slightly weaken the ruble. "Now we do not feel that market participants have started to play on the weakening of the ruble. On the contrary, it has strengthened. But I think that regular interventions will weaken such a strong and unjustified strengthening of the ruble, which we have seen in recent months," he said.The expert stressed that we shouldn't talk about stabilization of the Russian financial system at the moment. "We must understand that the reduction in imports, especially of machinery and equipment, affects the ruble. It is such an apathetic investment in the economy. It's not a stabilization," the analyst noted. Speaking about the Central Bank buying currency on the domestic market, Abramov noted that this operation aims to keep the ruble from strengthening a lot.

"The purchases will be carried out uniformly throughout the trading day to minimize the impact on the exchange rate. In the case of significant changes on the foreign exchange market, the amount of transactions can be changed," the Central Bank said.


The associate professor of stock markets and financial engineering of RANEPA, Vasiliy Yakimkin, told Vestnik Kavkaza that the ruble will be under slight pressure. "This decision of the Central Bank has shown that such a strong ruble prevents it. Apparently it wants to bring down the rate of the ruble, so it has made such a decision. Any purchase is pushing the price up. Therefore, the purchase of the dollar means that the price for it will grow," he stressed.
According to the expert, the decision of the Central Bank to buy foreign currency testifies that it needs a cheaper ruble, to help the Ministry of Finance in solving budgetary and other issues.


The analyst pointed out that there is no risk of a sharp collapse of the ruble, as the main risk is primarily linked to oil prices. He said that the Central Bank's need to replenish the foreign exchange reserves is high now.


A leading researcher at the Institute of Applied Economic Research of the Russian Presidential Academy of National Economics and Public Administration, Alexander Abramov, for his part, noted that the purchase of $1 billion per week will slightly weaken the ruble. "Now we do not feel that market participants have started to play on the weakening of the ruble. On the contrary, it has strengthened. But I think that regular interventions will weaken such a strong and unjustified strengthening of the ruble, which we have seen in recent months," he said.


The expert stressed that we shouldn't talk about stabilization of the Russian financial system at the moment. "We must understand that the reduction in imports, especially of machinery and equipment, affects the ruble. It is such an apathetic investment in the economy. It's not a stabilization," the analyst noted. Speaking about the Central Bank buying currency on the domestic market, Abramov noted that this operation aims to keep the ruble from strengthening a lot.

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