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Russia: The central bank changes FX intervention devices

Fri, May 16 2008, 07:17 GMT
by Lars Rasmussen

Danske Bank A/S


Yesterday the Russian central bank (CBR) announced that it had revised its FX interventions mechanisms. While interventions are currently aimed at reducing intraday fluctuations in the price of the dual-currency basket, the size of interventions will in the future be determined by several factors such as estimates of balance of payments data, federal budget execution and the balance of the FX market. Going forward we can now expect that the CBR, apart from the usual interventions to support the stability of the exchange rate against the dual-currency basket, will also carry interventions to limit liquidity strains, which often occur in relation with monthly or quarterly tax payments, by supplying local FX markets with roubles if needed.


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