Russia to step up forex interventions

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The Bank of Russia has announced additional sales of yuan on the forex market, as Moscow seeks to ensure economic stability in the face of Western sanctions.

The amount of Chinese currency to be sold will depend on the ruble sum withdrawn during the preceding six months from the National Wealth Fund (NWF) “for investment in authorized financial assets inside the country,” the regulator said in a statement on Friday.

The sales will start on August 1, in addition to regular operations with foreign currency.

“Transactions will be carried out in the currency section of the Moscow Exchange in a Chinese yuan-ruble instrument with a settlement period of ‘tomorrow’,” the regulator added.

The total volume of operations during a six-month period cannot exceed 300 billion rubles ($3.3 billion).

According to the regulator’s estimates, from January 1 to June 30, the government took over 288 billion rubles ($3 billion) from the NWF, implying that between August 2023 and January 31 next year, the Central Bank will sell 2.3 billion rubles ($25 million) worth of yuan daily, depending on the exchange rate.

According to the Central Bank, foreign currency will be bought or sold on the market evenly during each trading day of the month in order to minimize the impact of the operations on the exchange rate.

The NWF, which accumulates revenue from oil exports, was created to support the national pension system and to help cover budget deficits when needed.

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