Reserves Fall $32.2Bln in 2 Weeks

The country's currency reserves dropped $32.2 billion in the last two weeks, data on Thursday showed, and Standard & Poor's warned more falls could be bad news for the country's credit standing amidst market turmoil.

The government has committed some of the cash it has accumulated from high oil and gas prices to propping up a banking system and currency pummeled by a flight of investors.

Reserves hit a near six-month low of $530.6 billion on Oct. 10, and dealers' estimates of Central Bank intervention show that most of the latest week's $15.5 billion fall came from the bank selling dollars to aid the ruble.

UniCredit and Goldman both estimated last week's capital outflows at $13 billion, bringing total projections since early August to more than $60 billion.

"The key anchor of Russia's rating has always been its buffers, the large reserves," S&P credit analyst Frank Gill said.

"If we see those continue to hemorrhage, that would be the best forward indicator as to what the rating could do."

S&P cut the outlook on its BBB+ rating to stable from positive last month.

"Our bigger concern in Russia is not using these funds necessarily but the administration -- how are they actually going to be distributed," Gill said.

"Will some of that money get lost in the shuffle, will some of it become part of the capital flight? That's our biggest concern, if some of the reserve funds ended up offshore."