CB Reserves Drop by $900M

Gold and foreign exchange reserves fell by $900 million in the week ending Sept. 19, compared with a drop of more than $13 billion the previous week, the Central Bank's data showed Thursday.

The reserves data are closely watched by analysts for clues on capital flows amid the country's worst market turbulence since the 1998 meltdown. The change in reserves indicates the size of the Central Bank's currency-market interventions.

The Central Bank runs a managed float of the ruble, keeping it stable against the dollar/euro currency basket. It had to sell large amounts of foreign currency in recent weeks as investors dumped Russian assets following last month's war in Georgia.

Analysts estimated the size of net private capital outflows in August at up to $15 billion, while the Central Bank gave a more conservative estimate of $4.6 billion, pointing to the strengthening dollar and the falling oil price in August.

"The reported reserves number was boosted by the weaker dollar and higher gold price, which together added about $5 billion [to reserves]," said Anna Zadornova, analyst at Goldman Sachs.

"Stripping out the current account inflows, we estimate that $9.5 billion left the country during the last week, bringing the total net private capital outflow since the second week of August up to $52 billion," Zadornova said.