The Russian Finance Ministry announced on Wednesday a substantial increase in its gold and foreign currency purchasing program, committing to spend 8.2 billion rubles ($92 million) daily from September 6 to October 4, totaling 172.9 billion rubles ($1.9 billion).
“The allocated funds for gold and foreign currency purchases amount to 172.9 billion rubles,” the ministry stated. “From September 6 to October 4, 2024, daily purchases will be 8.2 billion rubles.”
This new allocation is nearly seven times greater than the daily expenditure of 1.12 billion rubles ($12.4 million) observed from August 7 to September 5, which totaled 24.65 billion rubles ($272.8 million).
The Finance Ministry expects significant oil and gas revenues of 162 billion rubles in September, surpassing initial projections by 10.9 billion rubles ($129 million) for August. The increased revenue provides a basis for estimating the Bank of Russia’s currency market operations related to the National Wealth Fund.
With the new purchasing volumes, the Central Bank is set to sell 0.2 billion rubles ($2.2 million) in currency daily, a decrease from the 7.8 billion rubles ($86.3 million) per day seen from August 7 to September 5.
In August 2023, Russia resumed its gold and currency purchases after an 18-month hiatus, following a period of selling or holding assets. This pause followed Russia’s foreign exchange interventions in January 2023, which began with sales of yuan reserves under a budgetary mechanism aimed at shielding the economy from commodity market volatility. The FX purchase program had been halted in late January 2022 and was subsequently suspended after the invasion of Ukraine.
With Western sanctions freezing much of Russia’s currency reserves, the yuan remains a key asset for these operations. Oil and gas revenues account for approximately one-third of Russia’s budget revenues.
