Ruble Defense Extends Russian Reserves SlideAnna Andrianova
Russia’s international reserves extended their slide to the longest since 2008, declining by a fifth from last year’s peak as the central bank attempts to smooth the ruble’s decline.
The value of the stockpile has declined for 12 consecutive weeks, losing $7.2 billion in the seven days through Nov. 7 to $421.4 billion, the central bank said today. That compares with a $10.5 billion drop the previous week.
The Bank of Russia has struggled to limit the ruble’s drop as sanctions against Russia over the crisis in Ukraine sparked capital flight and accelerated inflation. The regulator dropped regular interventions starting Nov. 10 and it will intervene only if financial stability comes under threat. It temporarily limited ruble liquidity to help stabilize the currency.
The ruble’s weakening is a “bad recipe for the economy,” central bank First Deputy Governor Ksenia Yudaeva told lawmakers in Moscow today, according to Interfax.
The ruble has lost 23 percent against the dollar in the past three months, the worst performance among more than 170 world currencies tracked by Bloomberg. The central bank spent about $30 billion last month, when the ruble fell to a record.
The central bank purchased 55 tons of gold in the third quarter, amounting for the more than half of all gold purchases by central banks in the period, according to the World Gold Council.