OREANDA-NEWS. October 08, 2010. In September, CBR sold USD 1.3bn net on the domestic currency market, according to CBR First Deputy Chairman Aleksei Ulyukaev. He added that CBR’s presence on the market had become "marginal", as monthly volumes of interventions dropped significantly from the levels above USD 10bn seen at the start of the year. Ulyukaev also said that on 1 October Russia’s international reserves exceeded USD 490bn., reported the press-centre of OTKRITIE Financial Corporation.

View: We believe that CBR’s presence on the market remains crucial. While the bulk of last month’s rise in reserves is related to USD depreciation versus euros and gold, the surprising stability of the RUB/USD nominal rate throughout the past month could hardly be explained by any other reason than CBR’s targeting of the exchange rate. This process was exacerbated by the fact that dollar weakness coincided with a period of large tax payments to the federal budget.

As a result, thruble value to the bi-currency basket plunged during September by almost 3% - mostly due to a dramatic decline in the RUB/EUR rate. This happened despite rallying commodity prices, with crude oil prices ending last month firmly above USD 80/bbl. All these trends indicate that CBR has in fact maintained a strong presence on the currency market. The future movements in the ruble rate will also strongly depend on CBR’s policy choices, but a combination of strong commodity prices and rising domestic inflation does not leave CBR much room to maneuver. We expect the ruble to start regaining its recent losses soon.