Russia, which has been active in the foreign exchange market since the beginning of the year, decided to reduce the dose of intervention. Russia’s Finance Ministry announced on Wednesday that it will sell 1.7 billion rubles ($18.9 million) worth of foreign currency daily between July 7 and August 4, Reuters reported.
The Ministry of Finance stated that the regular foreign exchange sales in the market next month will be worth 34.9 billion rubles in total. Most analysts estimated the intervention at 57 billion rubles per month.
After the autumn of 2022, Russia resumed foreign exchange interventions in the new year. Wanting to control the exchange rates, the government conducted communications to direct domestic market players to the Chinese Yuan.
Energy Prices Put Russia in a Hard Situation
The government intervened in foreign currency due to the decrease in revenues from Russia’s vital oil and gas exports. Decreased incomes and increased expenditures due to the war are also an important pressure factor in finance. The 5-month budget deficit in the country amounted to 3.41 trillion rubles, 17% above the target for the whole of 2023.
In the past, the ministry had planned to sell foreign currency worth 74.6 billion rubles between June 6 and July 7 to offset the decline in energy revenues. The new statement is considered as an important move within the scope of Russia’s efforts to ensure economic stability.
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