Russia’s central bank pledged yesterday to launch unlimited foreign exchange interventions if the rouble’s exchange rate strayed outside its target corridor, a response to the worldwide emerging market sell-off.
In a statement, the central bank said interventions would be “unlimited in volumes until the point when the value of the dual currency basket returns to the operational range”.
The bank runs a “dirty” float in which it conducts currency interventions when the rouble approaches the boundaries of a seven-rouble corridor against a currency basket made up of dollars and euros.
It wants to move to a free float by the start of next year, but the rouble’s 6 percent slide this year has already led Economy Minister Alexei Ulyukayev – a former central banker – to call for a delay.
Emerging market currencies have been under intense pressure since the Federal Reserve said it would taper its massive stimulus programme gradually.
Under its current policy, the central bank shifts the basket by five kopecks when a standard allotment of $350 million (R3.8bn) in interventions is exhausted.
The central bank said earlier it had shifted the corridor by an unprecedented 25 kopecks, to 33.95 to 40.95 to the basket, indicating that interventions topped $1.75bn on Wednesday as the rouble strayed outside the range. – Reuters