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Central Bank Done Buying Up Hard Currency for Reserve Fund

The Russian Central Bank's headquarters.

Russia's Central Bank has completed purchases of foreign currency used by the Finance Ministry to replenish the budget's Reserve Fund, data published by the Central Bank showed on Wednesday.

Central Bank purchases of roughly $100 million a day in recent weeks had weighed on the ruble, although pressure has abated since the Finance Ministry revised the program to link the volume and timing of purchases to market conditions.

The Central Bank, which publishes data on its market interventions with a two-day delay, said it had made no purchases of foreign currency on June 23.

Under a plan outlined in January, the Central Bank has sold 202 billion rubles ($6 billion) for foreign currency on behalf of the Finance Ministry, which is using the money to replenish its $87 billion Reserve Fund, one of two sovereign wealth funds financed from oil taxes.

That has meant the Central Bank purchasing the equivalent of 3.5 billion rubles ($104 million) on the open market each day.

The purchases were initiated in February but temporarily suspended in March as the Ukraine crisis raised market volatility, before being resumed in April under the revised conditions.

Analysts said that the end of the forex purchases on Monday was expected as it tallied with their calculations.

The central bank itself is not presently making daily forex purchases, as the ruble is trading in a range, near the center of its floating corridor against a dollar-euro basket, where the bank makes no interventions.

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