January 26, 2017 |
|Russia’s Finance Ministry plans to start buying or selling foreign currency on the local market from February through the central bank, the ministry said in a statement on Wednesday.|
“The Finance Ministry plans to conduct operations on purchases or sales of foreign currency on the internal currency market from February 2017 in order to increase stability and predictability of internal economic conditions and to decrease the influence of changes on the energy market on the Russian economy and state finances,” the ministry said.
If the Urals price is above U.S. $40 per barrel, the ministry will buy foreign currency with windfall oil revenues, but if the oil price is below the threshold, the ministry will sell foreign currency to compensate short-received oil and gas incomes. The volume of operations will depend on the amount of oil and gas revenues of the budget, the statement read.
The operations will have no impact on the currency market, but will minimize the effect of fluctuations in oil prices on the Russian economy until a new budget rule is introduced.
The ministry will evenly distribute its purchases and sales of foreign currency within a single trading day and month, and will publish monthly estimates of additional or short-received energy revenue for the month until 12.00 p.m. Moscow time of the third working day of the month, the ministry said.