The Bank of Russia decided not to extend the period of its recommendations being in force

On 2 July, the Bank of Russia declared that, due to the stabilizing situation on this country’s domestic currency market, it had made the decision that its recommendations aimed at maintaining the average monthly value of foreign assets and the mean aggregate value of net currency balance-sheet positions of credit institutions should not be extended further, over Q III 2009, the compliance with these recommendations formerly having been taken into consideration by the Bank of Russia when setting the limits for the participation of credit institutions in credit auctions.

Thus, the RF Central Bank demonstrated its confidence in the very low probability that any major capital outflow or consistent drops in the ruble’s exchange rate may occur in the second half-year 2009.

Besides, we believe that such restrictions would hardly be effective in a situation of high expectations of depreciation, because quite often it had happened so that credit institutions were increasing open currency positions not by their own will, but acting at the requests of their clients.

P. V. Trunin – Candidate of Economic Sciences, Head of the Department for Monetary Policy