Russia’s international reserves made up $517.5 billion as of October 17, the Bank of Russia said. The reserves decreased by $14.9 billion over just one week and by $80 billion since August 1. Russia’s international reserves lose over $2 billion a day, RIA Novosti reports.
The national reserves began to decline after the exacerbation of the liquidity crisis on the banking market. The reserves were evaluated at $600 billion in August. The Central Bank of the Russian Federation uses the funds to fill the banking system with cash assets. In addition, the Bank of Russia uses the international reserves to maintain the stability of the national currency, ruble.
Russia’s international reserves constitute of various currencies of the world, presumably of euros and dollars, the monetary gold and positions at the International Monetary Fund. Russia’s reserves are among the world’s largest, although it is believed that China takes the leadership at this point.
The Central Bank interventions and the growth of the dollar rate on the international market continue, which means that the reserves may decrease even further by the end of the week. On Wednesday, the Central Bank of Russia sold $4.5 billion to support the ruble, Reuters reports with reference to a dealer from a large foreign bank in Moscow.
The further change of the volume of Russia’s international reserves depends on the amount of the speculative pressure against the ruble, Natalia Orlova of Alfa-Bank believes. The specialist said that the reserves may cheapen to $500 billion by next Thursday due to the internal outflow of capital.
The reserves will have to be spent to maintain liquidity in the nearest future, The Vedomosti newspaper said on its website. Russia’s Vnesheconombank (Foreign Economic Bank) will receive $50 billion to refinance the foreign corporate debt.