Russia Could Make Windfall Selling Currency Reserves as Ruble Undervalued

Russian ruble banknotes of different denominations
Russian Finance Minister Anton Siluanov said that the Finance Ministry is ready to sell 500 billion rubles ($7 billion) from the Reserve Fund.

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MOSCOW, January 14 (Sputnik) – Russia could make a windfall if it sold its currency reserves because the ruble is currently undervalued on the market, Russian Finance Minister Anton Siluanov said Wednesday.

“If we use part of our reserve fund, the currency reserve fund, and transfer it into [foreign] currency and place it on the market, we would make some good money for the budget. … In today’s conditions of low oil [prices] and high percentage rates, and here we’re talking about the ruble being undervalued, then we could fully use part of the gold currency reserves already at the beginning of the year,” Siluanov said at the Gaidar Economic Forum in Moscow.

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Siluanov said that the Finance Ministry is ready to use 500 billion rubles ($7 billion) from the Reserve Fund and reminded that a similar strategy was applied last year.

On Tuesday, the Finance Ministry announced that in 2014, the Reserve Fund grew by 72.9 percent year-on-year, topping 4.94 trillion rubles, while the National Welfare Fund increased by 51.3 percent to 4.388 trillion rubles.

The current growth of Russian sovereign funds has been largely due to the depreciation of the ruble, triggered by falling oil prices and geopolitical tensions over the conflict in Ukraine.

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