The Central Bank of the Russian Federation has reported an increase of gold and currency reserves for the first time since September of the current year. The reserves gained five billion dollars in only a week – from November 21 to November 28. Analysts explain the growth with the revaluation of the cost of gold, the British pound and the euro. They believe that the growth of the reserves was a temporal phenomenon and that they would decrease in the medium term.
The growth of the gold and currency reserves last week can be explained with several factors, Yulia Tseplayeva, the chief economist with Merill Lynch in Russia believes. “The growth of the pound and the euro quotations could add three billion dollars to the dollar cost of the reserves. In addition, gold and securities of foreign issuers, in which a part of the reserves was invested, have advanced in prices too. The inflow by invoice of current operations was positive too. Finally, the Bank of Russia spent six billion dollars last week to support the ruble rate,” the expert said.
The reserves were evaluated at almost $600 billion in August, but began to reduce speedily against the background of collapsing oil prices and the outflow of capital. The Central Bank was forced to spend huge amounts to support the national currency. Sergei Ignatyev, the chairman of the Central Bank of the Russian Federation, acknowledged that the bank had spent $57.5 billion in October on the purpose. Prime Minister Putin said during his live communication with the Russians Thursday that the money had been saved in case critical conditions could emerge in the global and the Russian economies.
The Russian gold and currency reserves will continue to decline if the authorities continue to take measures not to let sudden ruble fluctuations occur. “The growth of the reserves at the end of November does not mark the beginning of a new trend. The Central Bank has spent about nine billion dollars to support the ruble,” Yulia Tseplayeva of Merill Lynch said.