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. Last Updated: 07/27/2016

Central Bank Beefs Up Reserves

The Central Bank has bought more than $2 billion of foreign currency since the start of April as it seeks to retain a positive trade balance and replenish reserves, First Deputy Chairman Alexei Ulyukayev said Wednesday.

The ruble has already gained 0.6 percent against the dollar this month as a stabilization in oil prices and global equity markets lures investors back to the world's largest energy exporter. Ulyukayev said in March that the bank would buy dollars and euros to prevent the ruble from strengthening above 38.50 versus its target currency basket.

The ruble at 35 or 36 against its target basket is "more indicative" of a balanced current account than the rate of 41 set before the stabilization of the economy, he said.

Ulyukayev also recommended that Russians sell any foreign currency they may have bought. In response to a question at the conference, he said that the 41-ruble level against the euro/dollar basket was inflated and that the ruble was more likely to strengthen than weaken.

"Those who sell off foreign currency at a later stage will have a negative exchange rate difference," he said.

Russia could also see a 2009 trade surplus of $50 billion to $80 billion, down from $201.2 billion in 2008, Ulyukayev said. If the average price of oil is $41 a barrel, the surplus may be $40 billion, he said.

(Bloomberg, Vedomosti)