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Kremlin Aide Says Bank of Russia Should Limit Ruble's Rebound

The Bank of Russia should consider resuming purchases of dollars and euros for the country's reserves once the ruble strengthens beyond 60 to the dollar, presidential aide Andrey Belousov said Friday.

"There will be a need to buy foreign currency if the ruble strengthens too much...I think if the dollar falls below 60 [rubles], than it's time to start," Interfax news agency quoted Mr. Belousov as saying.

 

 

The Bank of Russia let the ruble float in 2014 after spending billions of dollars in fruitless attempts to stop the currency from falling rapidly under pressure from Western sanctions and falling oil prices.

The banks has repeatedly said it targets no specific ruble level but other officials have repeatedly indicated that Russia isn't interested in a strong ruble as the weaker currency helps to offset the negative impact of low oil prices on the budget.

After buying up to $200 million a day from mid-May, which helped to ease pressure on the Russian currency, the Bank of Russia had to halt daily interventions in late July as the ruble got a hit from falling oil prices. The ruble has lost around 45% of its value compared with a year ago.

The central bank had previously said it was planning to bring the level of gold and forex reserves back to " comfortable" levels of $500 billion in the next three to five years by purchasing foreign currency on the local market.

The ruble was 0.7% weaker at 67.65 versus the dollar as of 0845 GMT on Friday.



original source: http://www.nasdaq.com/article/kremlin-aide-says-bank-of-russia-should-limit-rubles-rebound-20150904-00063#ixzz3knyHcp5s

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