ITAR-TASS. The Bank of Russia could finally refuse from the bi-currency corridor by January 2015, and by the end of this year the regulator would likely modify parameters of its exchange rate policy once or twice, Sberbank CIB wrote in a research note.
The current revision of the exchange rate policy’s parameters, which is aimed at further liberalization of the ruble’s exchange rates, is a way towards the refusal from the use of the bi-currency corridor and, as a consequence, from any calculation of the bi-currency basket, the bank’s experts believe.
Sberbank CIB analyst Vladimir Pantyushin believes that the Bank of Russia intends to formalize its plan of action in case of the ruble’s sharp depreciation, which occurred this March.
This March the Bank of Russia’s actions in principle aimed to prevent any panic on the currency market. Meanwhile, the Bank of Russia formally acted within the bi-currency basket, but, in fact, it introduced temporary deviations from the liberalization process. Presently, the Bank of Russia, in our opinion, wants to perfect its actions outside the current mechanism so that market players understand what the Bank of Russia is going to do in similar cases," the expert wrote.
Earlier today the regulator made some amendments to the exchange rate policy mechanism in order to increase flexibility of the ruble. So, the interval of the admissible figures of the bi-currency basket’s value (the floating operating interval) was symmetrically broadened from Rub 7 to Rub 9.
Furthermore, the Bank of Russia set the scope of currency interventions aimed at smoothing out volatility of the ruble’s exchange rates in all internal ranges of the floating operating interval as equal to zero.
The Bank of Russia also lowered the amount of accumulated interventions, which move the boundaries of the floating operating interval by 5 kopecks, from $1 bln to $350 mln. The investment firm emphasized that the Bank of Russia keeps plans to shift to the floating exchange rate by the end of 2014.
Said changes were made within the efforts to shift to inflation targeting, for the successful execution of which one of the necessary conditions is to give up exchange rate management. The Bank of Russia plans to accomplish the shift towards the floating exchange rate until the end of 2014, the regulator said in a press release.
