OREANDA-NEWS. June 15, 2009. According to CBR, international reserves stood at US409.5bn as of the week ended 5 June 2009, up from US401.1bn on 29 May 2009. Given that the euro depreciated slightly against the dollar during that period, the entire increase can be attributed solely to the Bank of Russia’s purchases of foreign currency on the market, reported the press-centre of OTKRITIE FC.

View: In and of itself, the fact that reserves are back on track is good news. But even more importantly, we can see behind this new trend that the good old way of generating ruble liquidity for the banking system is being restored and it will help the economic recovery gain traction. In addition, the central bank wins plaudits for having avoided excessive ruble appreciation lately as a weaker ruble would also be helpful to local producers.

We are convinced that the current slower appreciation will limit future depreciation, which, accordingly, should soften the effects of monetary policy.