Russia Mulls Early Return To Forex Market As Rouble Strengthens On Oil Rally

Finance Minister Anton Siluanov says Russia may resume foreign currency operations earlier than planned as the rouble strengthens on higher oil prices.

Russia’s government is considering an early return to the foreign currency market after the rouble strengthened in recent weeks, driven by rising oil prices, Finance Minister Anton Siluanov said on Thursday.

Speaking at a capital markets conference in Moscow, Siluanov noted that the improvement in the currency’s performance has prompted officials to review the current suspension of forex operations, which was initially set to run until July.

The government paused its foreign exchange interventions in March after falling oil prices earlier in the year raised concerns over pressure on fiscal reserves. Under Russia’s budget rule, the state typically buys foreign currency when oil prices exceed a set threshold to build up its sovereign wealth fund, currently benchmarked at $59 per barrel, and sells reserves when prices fall below that level to support the budget.

However, a recent rebound in oil prices partly linked to heightened geopolitical tensions has strengthened the rouble by about 8% against the US dollar in April, raising questions among analysts and businesses about the need for the continued suspension.

Siluanov said the government is now reassessing the policy and could make a decision on resuming forex market operations in the near future.