Russian central bank ready to increase interventions in currency market

GMT 03:23 2014 Saturday ,08 November

Arab Today, arab today Russian central bank ready to increase interventions in currency market

Russian central bank
Moscow -XINHUA

Russia's central bank said Friday it was ready to further intervene in domestic currency market to secure the country's financial stability amid a spike in consumer demand for foreign currencies.
"We have noticed signs of a speculative demand (on domestic currency markets) in the past few days, which poses risks for Russia's financial stability," the central bank said in a statement. "We are ready to increase currency interventions at any time, as well as other financial instruments."
The pledge came just two days after the central bank announced measures to stop the ruble's fall against the U.S. dollar and the euro. It includes limiting the daily volume of foreign exchange operations, introducing a 12-month foreign currency repurchase deal, and making adjustment to the monetary and financial policy for 2015-2017.
The central bank warned that a period of possible volatility of ruble rate may follow as the currency market adjusts itself to the changes in the exchange-rate regime, RIA Novosti news agency reported.
"The process of currency market's adjustment to a new exchange- rate regime mechanism may take some time, during which the exchange rate may experience certain fluctuations," the statement said.
Ksenia Yudayeva, the first deputy chief of the Central Bank of Russia, said Wednesday that the bank would keep stepping in to avoid serious shock to the market and to prop up the ruble.
The ruble has lost more than a quarter of its value since the start of 2014 due to weakness in the Russia's economy, which was caused by falling oil prices and economic sanctions posed by the United States and the European Union.

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