Russia's Finance Ministry said Wednesday it would sharply increase purchases of foreign currency and gold over the next month as the government seeks to replenish its sovereign wealth fund and curb the ruble's rapid appreciation.
The ministry said it would spend 208.2 billion rubles ($2.81 billion) on foreign currency and gold purchases between June 5 and July 6, using additional oil-and-gas revenues generated by higher crude prices. Daily purchases will amount to 9.9 billion rubles ($133.7 million).
The operations will be carried out by Russia's Central Bank on behalf of the government under the country's fiscal rule mechanism.
The move highlights Moscow's efforts to rebuild the National Wealth Fund (NWF), a key reserve used to support government spending, while also easing upward pressure on the ruble, whose strength has weighed on export revenues and budget receipts.
Actual market purchases by the Central Bank will total 5.3 billion rubles ($71.6 million) per day after accounting for previously scheduled compensating operations linked to earlier spending from the NWF. Even so, the net volume of purchases will be 4.4 times higher than in May, when daily purchases amounted to 1.2 billion rubles ($16.2 million).
