Bank of Russia commentary on 2024 H2 transactions with NWF funds in domestic FX market
Since 9 January 2024, the Bank of Russia has been following the previously announced procedure to conduct transactions in the domestic FX market that are associated with replenishing and using the funds of the National Wealth Fund (NWF), including all transactions carried out with such funds in 2023. Therefore, the Bank of Russia reports the amounts of the transactions performed in the domestic FX market from 1 July to 28 December 2024.
The daily amount of transactions in 2024 H2 will be calculated based on the amounts of the purchase or sale of foreign currency as part of regular fiscal rule-based transactions as announced by the Russian Ministry of Finance on the third business day of each month. Such amounts will be adjusted by the net value of:
- The difference between the amount of regular fiscal rule-based transactions deferred from 10 August until 31 December 2023 (₽1,529 billion) and the amount of the NWF funds spent to finance the budget deficit outside the fiscal rule for 2023 (₽2,900 billion). The specified amount assumes sales worth ₽1,371 billion (₽5.53 billion/day, given the uniform distribution of the total amount over entire 2024).
- Foreign currency sales as part of net NWF investment in ruble-denominated eligible financial assets made in 2024 H1 in the amount of ₽376 billion (₽2.87 billion/day, given the uniform distribution of the total amount over entire 2024 H2).
Thus, during 2024 H2 (from 1 July to 28 December 2024), the Bank of Russia will buy or sell foreign currency based on the amount of fiscal rule-based transactions announced by Russia’s Ministry of Finance adjusted for the amount to be sold totalling ₽8.40 billion/day.
At the end of December 2024, the Bank of Russia will publish information on the amount of the adjustment of regular fiscal rule-based transactions in 2025 H1 taking into account the data of Russia’s Ministry of Finance on net NWF investment in ruble-denominated eligible assets in 2024 H2 and the amount of the NWF funds spent on financing the federal budget deficit outside the fiscal rule for 2024.