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. Last Updated: 07/27/2016

CB Vows Stabilized Reserves

Central Bank head Viktor Gerashchenko said Thursday the bank's gold and foreign currency reserves would remain stable at around $37 billion for the next two to three months after two weeks of falls.

The Central Bank said earlier Thursday its gold and foreign currency reserves fell to $37.1 billion on Sept. 14 from $37.4 billion on Sept. 7, the second consecutive weekly drop.

Gerashchenko said the latest fall in reserves was not directly linked to a need to maintain ruble stability after the devastating attacks on the U.S. targets last week, but acknowledged that the Central Bank had sold dollars.

He said the ruble, supported by Russia's strong economic performance, would remain stable despite global shockwaves triggered by the U.S. attacks. "There will be nothing like 1998, given the current economic situation, budget surplus and sound Central Bank reserves," he said.

But there was little room in the market for the Central Bank to replenish reserves, as the Finance Ministry was actively buying dollars ahead of a $1 billion sovereign Eurobond redemption due in November, Gerashchenko said.

He restated his earlier forecast that $42 billion to $45 billion would be the best reserves level to maintain the foreign exchange rate and repay foreign debt.

Gerashchenko said the Central Bank was due to repay $500 million to the International Monetary Fund in October on a $2.8 billion loan extended in July 1998.

Money supply would rise more than 24 percent next year compared with 20 percent expected this year, he added.

Money supply rose to 1.33 trillion rubles ($50 billion) on Aug. 1 from 1.14 trillion rubles on Jan. 1.

Gerashchenko said he hoped to leave his post when his term in office expires in a year.

"I do not have any intentions to serve a second term," Gerashchenko said on Ekho Moskvy radio station. "One has to think about his health."