Russia's international reserves are no longer an effective gauge of Bank Rossii's weekly currency sales and purchases because of the volatility in foreign-currency correspondent accounts, Renaissance Capital said.
Weekly changes in the stockpile are "sending signals about the regulator's interventions that seem to contradict market evidence" because of the "highly volatile" funds held by commercial banks in accounts with the central bank, Renaissance Capital analysts led by Anton Nikitin wrote in a note yesterday.
The accounts have a "significant distorting effect on the statistical data, as the funds on these accounts are highly volatile and can significantly influence the central bank reserves weekly data," according to RenCap.
The so-called correspondent accounts, which are counted as part of the world's third largest reserves, were introduced in December 2008 as a way of ensuring Russian lenders adhered to limits on the amount of foreign exchange they can hold.
While restrictions were lifted last summer, triggering an outflow of capital abroad, "some banks still use these accounts, for reasons unknown to us," said RenCap.
Withdrawal from banks' accounts may have contributed to last week's "significant" $3.9 billion (Dh14.32bn) decline in reserves, which can't be explained by changes in the prices of reserve assets and the extent of central bank interventions, the bank said. RenCap now plans to rely on "market evidence" and the central bank's monthly reserves data to estimate the regulator's currency interventions, the report said.
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