Russia considers to buy Rupee, Yuan, Turkish lira to hold its NWF
Image courtesy:Central Banking
On Friday, Russia considers buying the currencies of China, India, and Turkey for holding in its National Wealth Fund (NWF), having to lose the capability of buying dollars or euros because of sanctions, says the central bank.
The bank said it was sticking to the policy of a free-floating rouble exchange rate but emphasized that it was important to reinstate a budget rule which diverts excess oil revenues into the country’s rainy day fund.
In a report on its monetary policy for 2023-2025, the central bank said that there is a discussion on the various options on how to return to the fiscal rule and replenish the NWF, considering the Western sanctions against Russia over its actions in Ukraine.
The central bank further said that the Russian Ministry of Finance is working on the possibility of implementing an operational mechanism of the budget rule mechanism for the replenishment/spending of the NWF in currencies of friendly countries (yuan, rupees, Turkish lira, and others).
Experts have put forward their concerns about the insufficient liquidity in such currencies and about the possible risks. Inflation in Turkey, for example, jumped to nearly 80% in June, a 24-year high, Reuters reports.
