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Peter Davis

An writer at FOMOdrive

  • Sep 07, 2023
  • 2 min read

The Ministry of Finance of the Russian Federation will increase the purchase of foreign currency by almost seven times

The Russian Federation's Ministry of Finance declared the sum that it will be utilizing to purchase foreign currency and gold in September.

The amount of purchases made will be almost seven times greater than in August.

The ruble could be at risk of collapse due to a sudden surge in currency purchases, however these will be delayed until 2024.

The Russian Finance Ministry announced on Tuesday that the federal budget of Russia in September may receive an additional 279.1 billion rubles in oil and gas revenues.

In August 2023, the actual oil and gas revenues received were 2.9 billion rubles less than the expected monthly volume.

The department has set aside 276.2 billion rubles to buy foreign currency and gold, with a daily budget of 13.15 billion rubles. These purchases will take place from September 7 to October 5, according to Prime.

The currency purchases from August 7 to September 6 totaled 40.5 billion rubles, or an average of 13.15 billion rubles per day. This is a 6.8-fold increase from the previous month.

In early 2022, the Russian Ministry of Finance had suspended their buying of foreign currency on the domestic market due to sanctions and a sharp rise in the dollar. However, in August, with Urals oil quotations rising above $70 per barrel, these purchases were resumed as part of the budget rule.

The Ministry of Finance has decided to adhere to the new budget rule, which entails only purchasing yuan and gold, while eliminating the currencies of nations that are not friendly from the fund's composition.

The Bank of Russia is responsible for carrying out purchases of yuan and gold on the market in the interests of the Ministry of Finance. However, due to the sharp depreciation of the ruble, the regulator suspended purchases of foreign currency from August 10, 2023 until the end of the year.

The Bank of Russia will decide on deferred purchases after resuming regular purchases under the fiscal rule in 2024 and beyond.

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