Decline In Central Bank's Currency Reserves Resembles That Of 1998

The volume of gold and foreign currency reserves decreased by $1.2 billion as of December 7 compared to that as of the previous reporting date, the PR Department of the Central Bank reported. As it was reported earlier, the volume of gold and foreign currency reserves fell by $1.3 billion by November 30. Accordingly, the reserves declined from $38.6 billion to $36.1 billion, i.e. by $2.5 billion, in just two weeks from November 23 until December 7. A week ago the Central Bank referred to the redemption of Eurobonds as the reason for the decrease in the volume of foreign exchange reserves by $1.3 billion a week ago. This time the bank did not give a reason for the new decline, although the volume of reserves has returned to the July level. The last time the gold and foreign currency reserves were falling so rapidly was at the beginning of August 1998, just before the default. That time, as well as now, the main bank's currency reserves were declining substantially due to large-scale dollar interventions by the Central Bank to support the ruble. Therefore, the volume of US currency sales by the Central Bank of Russia during the period from November 30 until December 7 of this year is comparable to that of the similar sales by the Central Bank over three years ago.