Russia's Finance Ministry plans to spend 70.5 bln rubles ($1.2 bln) on foreign currency purchases on the domestic market during the period from March 7 to April 6, 2017, the Ministry said in a statement.
Thus, the daily volume of foreign currency purchases will amount to the equivalent of 3.2 bln rubles ($54.5 mln).
According to the ministry’s forecast, additional oil and gas revenues in March will amount to 91.9 bln rubles ($1.56 bln). However, in February the difference between actual oil and gas revenues and forecast reached 21.4 bln rubles ($364.4 mln).
"If the current environment remains unchanged, the volume of funds allocated for purchases of foreign currency on the domestic foreign exchange market is expected to increase in the future," TASS cited the ministry as saying.
Recall, the central bank bought the equivalent of 113.1 billion rubles ($1.9 billion) between Feb. 7 and March 6.
A professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, speaking to Vestnik Kavkaza, explained that one-time purchase of foreign currency of 70.5 billion rubles will not have a serious pressure on the ruble. "When the Ministry of Finance buys foreign currency for rubles, it increases the amount of money in circulation. It can lead to accumulation of excess liquidity by banks, which at one point may appear on the currency market," the expert pointed out.
Abramov added that if we analyze the factors of liquidity creation in the banking system over the past few months, it becomes clear that the arrival of an additional amount of liquidity was largely due to the Finance Ministry's operations, namely currency purchases.
In general, he appreciated the practice of sending additional incomes from the sale of oil to replenish foreign exchange reserves. "Thus, the Ministry of Finance replenishes the reserve fund, under the new budgetary rule, limiting the costs, depending on the level of oil prices This shows that the Finance Ministry is reducing costs. The main thing here is fiscal policy," Alexander Abramov concluded.
A researcher at the Center for Study of Structural Studies of the Institute of Applied Economic Researches of RANEPA, Mikhail Khromov, noted that the volume of purchases in March will be lower than in February, but despite the intervention, in February the ruble strengthened: on March 1, the dollar weakened by more than two rubles in comparison with February 1.
The economist warned that it is difficult to to give any definite predictions about the impact of the ministry's currency purchases on the ruble, since the formation of the national currency involves a number of factors. "It all depends on the particular situation. In February, most likely, major players were selling currency, which, for example, may not happen in March. Then the billion dollars could be enough to weaken the ruble, or at least stop its strengthening," Mikhail Khromov noted.