Central Bank of Russia’s Fx/gold reserves increased by USD 1.3bn (0.25% w/w) to USD 513.7bn, bouncing from a nine-month low USD 512.4bn seen in the previous week. Since May 5 the reserves still lost USD 20bn.

The decline in reserves at the end of April was attributed to a decline in global gold prices. On the reporting week the increase was attributed to CBR gaining on currency swap operations and slight positive revaluation of gold assets by analysts surveyed by Reuters.

As reported by CBR, Fx/gold reserves increased by 1.69% y/y and 1.04% m/m to USD 533.218bn in April 2013, after 0.3% m/m increase in March following two consecutive months of 1% m/m decline in reserves seen in January and February, data by CBR shows. In April, Fx reserves picked up by 2% m/m to USD 473.121bn, while gold reserves declined by notable 7.1% m/m to USD 46.89bn. In y/y terms gold reserves were 2.2% lower as of end of April.

In 2012, reserves swindled between USD 510bn and USD 514bn in May-Aug after a USD 13.9bn dive of the indicator amidst RUB depreciation in May, recovering to USD 530bn in September and picking up further in December 2012 to RUB 537.618bn, recording a 7.8% y/y growth in 2012. In 2011 Fx/gold reserves increased by 4% y/y to USD 498.649bn.

On the reporting week RUB/USD rate was set by CBR at RUB 31.34 on May 21, declining to RUB 31.23 on May 23 and closing the week at RUB 31.32 on May 25. RUB/EUR rate was set at RUB 40.26 on May 21, declining to RUB 40.34 on May 23 and increasing to RUB 40.51 on closing May 25. On the closing date of May 25 bi-currency basket (0.55 USD and 0.45 EUR) thus amounted to RUB 35.45 (flat as of the end of the previous week). This was below the upper band of the exchange rate corridor for the basket (RUB 35.65).

According to a report by Reuters this week on Thursday May 23 RUB was traded on MICEX by the end of the session at RUB 36.07 to the bi-currency basket, cost of the basket growing by 31 kopek d/d to a six-week high. Negative trend in RUB was attributed to decline in oil prices. At the same time, the effect of the sales of Fx export revenues for large domestic tax payments that supported RUB in previous weeks was over.

According to preliminary data, RUB effective exchange rate to foreign currencies declined by 1.5% in April, national currency weakening for the second month in a row. In the beginning of April RUB weakened to the benchmark bi-currency basket to the level lowest since September 2012, and for most of the April RUB was traded outside of the CBR’s bi-currency basket price corridor (upper band set of RUB 35.65). In the last week of April RUB gained, however, due to exporters paying RUB 200bn-RUB 240bn in NDPI extraction taxes largely covered by selling Fx exports revenues and rebounding global oil prices. In April CBR sold USD 663mn worth of USD amidst RUB weakening after making no interventions in March and buying USD 596mn and USD 119mn in January and February, respectively.