Russia's central bank sells $10bn of reserves to stem rouble's fall

Monday 03 March 2014 11.37
The Bank Rossii has taken steps to minimise the economic impact of Russia's involvement in the Ukraine crisis
The Bank Rossii has taken steps to minimise the economic impact of Russia's involvement in the Ukraine crisis

Russia's central bank has sold up to $10 billion, or 2% of its gold and foreign exchange reserves, to stem the rouble's fall, Moscow foreign exchange dealers estimated.

"There have been some $11 billion (of foreign currency) sold today, some $10 billion came from the central bank," said Mikhail Paley, a dealer at VTB Capital.

"There is no one aside from the central bank selling (forex) today," said a dealer at a large Western bank, adding that the central bank sold "up to $10 billion."

The central bank releases its interventions in foreign exchange markets only with a two-day lag.

At 10.50am Irish time, the rouble was trading 2.1% down against the dollar on the day at 36.49.

The central bank's reserves stood at $493.4 billion, according to the latest data.

Earlier The Bank Rossii raised its main interest rate to 7% from 5.5 in a surprise move that came as concerns mounted over the consequences of intervention in Ukraine for the Russian economy.

The authority implied the decision was aimed at limiting the knock-on economic effects of the Ukraine crisis.

"The decision is aimed at averting the appearance of risks for inflation and financial stability linked to the increased volatility on financial markets," it said in a statement, without specifically mentioning Ukraine.