The introduction of the floating exchange rate regime means the diminished ability of The Bank of Russia regular in performing currency interventions to influence the ruble exchange rate. The policy of the central bank in a floating rate is to not interfere in the market processes under normal conditions and to allow the ruble exchange rate to fulfill its role as the Built-in stabilizer.
Similarly, the Bank of Russia continues to closely monitor the situation in the foreign exchange market and can conduct operations with foreign exchange in order to maintain financial stability. The Bank of Russia can conduct operations in the foreign exchange market and to replenish international reserves.
As a protector of Russian financial stability, the Bank of Russia considers such dynamics of the exchange rate, which can lead to the formation of stable devaluation expectations, increased demand for cash foreign currency, increased dollarization of deposits and a significant deterioration in the financial stability of credit institutions and enterprises.
A significant amount of international reserves will enable the Bank of Russia to conduct operations on the international forex markets in order to maintain financial stability, as well as ensure uninterrupted servicing of external debt for several years, even in a difficult economic situation.
When making decisions on the purchase of foreign currency, the Bank of Russia takes into account the dynamics of the exchange rate, the state of the Russian economy and the balance of payments.
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Olja Milicevic
Business Development
omilicevic@tvmarkets.com
