Experts from finanz.ru resource calculated that the transaction of the Central Bank of Russia in the international currency market in 2017 turned into a blow to the gold and currency reserves of Russia.
The Central Bank of the Russian Federation “did not guess” the dynamics of the euro to the dollar and suffered billions of losses on exchange rate differences, it follows from the data of the central bank and finanz calculations.
Over the year, the Central Bank sold almost a third of all investments in the European currency: beginning with 115.4 billion euros (32.2% of reserves), by the end of the year the regulator had only 78.28 billion (21.7%).
These funds the Central Bank has actively converted into the dollar: its share in reserves from 40.4% rose to a record of 45.8%, the regulator said in the financial report for 2017.
Most of the transactions for the sale of the euro and the purchase of dollars by the Central Bank made in the first quarter of last year, when the rate was about the minimum for 12 years values - between 1.03 and 1.08 dollars per euro.
Near the market lows in January-March, the Central Bank converted into the dollar 19.5 billion euros and reduced the share of the European currency in reserves to 25.7%, according to the regulator’s report on the management of gold reserves.
The Central Bank made a bet on the dollar, but the market moved in the opposite direction: in the second quarter, the euro began to rise, and by the end of the year it added 13.8% and reached the level of $ 1.2 per euro.
As a result, the deal was hit by the size of reserves: if the central bank left investments in the euro intact, the exchange differences would increase the gold reserves by 2.5 billion dollars. At the end of the first quarter of 2018, this difference would have reached $ 4.5 billion.
Apparently, the Central Bank got rid of the euro because of the negative yield of securities in the European currency: according to the regulator’s report, at the end of the year it amounted to minus 0.58% per annum. In a minus also there were investments in the British securities (-0,04% annual).
The loss of reserves was recorded also by the Russian Ministry of Finance, which kept money from the Reserve Fund on currency accounts at the Central Bank and continues to keep the money of the National Welfare Fund.
At the end of 2017, the return on these investments was minus 0.1% per annum, the ministry reported at the end of February.
For the period from December 15 to March 31 the result was the same – minus 0.1%, the Finance Ministry said on April 5.
The total loss of the Central Bank for 2017, we recall, amounted to 435.3 billion rubles and became a record in history.
Original article on this link.