Russia to convert foreign currency from wealth fund to arrest rouble's fall
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RUSSIA may unseal its US$88 billion Reserve Fund and convert some of its foreign-currency holdings into roubles, the latest government effort to prop up an economy veering into its worst slump since 2009.
"Together with the central bank, we are selling a part of our foreign-currency reserves," Finance Minister Anton Siluanov said in Moscow on Wednesday. "We'll get roubles and place them in deposits for banks, giving liquidity to the economy." The move shows the narrowing options left to policy makers after the central bank spent about US$88 billion on defending the ruble last year as the lowest oil prices since 2009 and sanctions imposed over the conflict in Ukraine push the economy to the brink of a recession. Authorities have responded to the currency crisis with emergency moves that included the biggest interest-rate increase since 1998, a 1 trillion-rouble (S$20 billion) bank recapitalisation plan and measures to force exporters to change more of their foreign revenue into rubles.
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