Gold and currency reserves of Central Bank to plummet

The growth of gold and currency reserves of the Central Bank of Russia will be much lower in the second half of 2002 than in the first one, Central Bank head Sergey Ignatyev said at a conference for investors organized by the Renaissance Capital Investment Group today. According to him, this is attributed to the fact that at the end of the year "the problem of budget implementation is preserved". The chairman of the Central Bank pointed out that in December budget institutions spent large amounts of resources saved at their account over a year. That is why the Central Bank will have to reduce currency reserves this year, like last year, in order "to hamper the considerable growth of the money supply or ruble devaluation". This is the reason why there will be "a considerable decrease in gold and currency reserves" in December, the banker stressed.

Answering journalists' questions about the $500m decrease in gold and currency reserves in May, Ignatyev said that this was "a quite normal iteration when one sells or buys gold". He also reported that the weakening of the dollar against the euro, which was currently taking place on the world market, would not influence the servicing of the foreign debt much. According to the head of the Central Bank, the foreign debt of Russia is designated both in dollars and in euros. This is why "the weakening of the dollar will not influence budget implementation considerably"; neither will it impact the volume of gold and currency reserves.

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