The Russian central bank’s First Deputy Chairman Alexei Ulyukayev said Thursday the bank will continue raising the share of gold in its gold and foreign exchange reserves for the foreseeable future.
Russia’s central bank sees no need to change monetary policy or the currency regime for now, and wants to continue increasing the share of gold in its reserves, the bank’s First Deputy Chairman Alexei Ulyukayev said on Thursday.
“The situation is not brilliant but there is a steady balance between inflationary risks and economic growth. That is why we do not see a need to change rates either way,” Ulyukayev told the Duma, Russia’ lower house of the parliament.
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Earlier on Thursday, Ulyukayev said the central bank would hold an interest rate meeting on Oct. 28.
Ulyukayev also said that the existing currency regulation scheme suited the central bank, which had no plans to amend it in the “foreseeable future”.
“The main parameter of the exchange rate mechanism for the foreseeable future is the (rouble’s) floating corridor with moving boundaries, depending on buying or selling of foreign currencies,” Ulyukayev told the Duma.
The central bank keeps the rouble within a floating band versus the euro-dollar basket, in which it sells foreign currencies close to the upper boundary and buys dollars and euros, when the rouble firms towards the lower boundary.
So far this month, the central bank has sold around $4 billion from its reserves to prevent the rouble from excessive weakening, after interventions of around in $10 billion in September.
The rouble has weakened by 5.6 percent to 36.63 versus the basket since early September, touching its weakest levels since 2009 at 37.65 on Oct. 5 .
“For the central bank this devaluation has resulted in minor costs of only $14 billion,” Ulyukayev said.
He also said the central bank would keep on boosting gold as a share of its reserves, the world’s third-largest foreign exchange reserves totalling $517.7 billion as of Oct. 14.
“We have been implementing a programme of raising the share of gold in the reserves for several years … we are acquiring huge volumes … We are not planning to step away from this path,” Ulykayev said.
The central bank had 27.4 million of troy ounces of gold, or 852.2 tonnes in its reserves as of Oct. 1, up nearly 8 percent from at the start of 2011.
Calculated on the central bank’s official price for gold of $1,643.42 per ounce set on Oct. 20, the bank has $45.03 billion in gold, or 8.7 percent of its forex reserves as of Oct 14. (Additional reporting by Lidia Kelly and Maya Dyakina; Writing by Andrey Ostroukh; Editing by Susan Fenton)
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