FX purchases had been suspended last August due to volatility in the ruble

Russia’s Finance Ministry has announced the volume of the first purchases of foreign currency under the country’s budget rule after a hiatus since last August, according to a press release on Monday.

The Russian central bank announced in August 2023 that it would suspend purchases of foreign currency until the end of the year in order to avoid exacerbating weakness in the ruble. The regulator said it would resume buying and selling foreign currency through its sovereign wealth fund in 2024 insofar as conditions in financial markets would allow. Sales of foreign currency resumed on January 15.

Under its budget rule, which has been reinstated after a de-facto suspension last year, Russia either sells foreign currency from its sovereign wealth fund to make up for any shortfall in revenue from oil and gas exports or makes purchases in the event of a surplus.

According to the statement, the ministry expects oil and gas revenues in the federal budget this month to come in $2.1 billion above the target. It said the daily volume of purchases would be the equivalent of 3.7 billion rubles ($41 million) during the period of February 7 to March 6. The total amount of funds allocated for the purchase of what is formally called “foreign currency and gold” will amount to $806 million. However, transactions are now mainly carried out in the Chinese yuan.

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