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    RUSSIA'S GOLD AND CURRENCY RESERVES UP

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    MOSCOW, February 19, 2004. (RIA Novosti) - During the week of February 6 through 13, the volume of the Russian gold and currency reserves increased by 3.7 billion dollars, by 10.2 billion dollars since the start of the year.

    On Thursday the Central Bank announced the reserves standing at 88 billion dollars, which is another record-high since the start of their publication ten years ago.

    The growth is directly connected with the rouble interventions by the Central Bank on the currency market. Since early 2004 the record figure has many times been updated.

    "Nobody on the market is surprised because the Central Bank has been buying currency from market participants and keeping the purchase rate at 28.485 roubles per dollar", said Pavel Suprunov, chief of the Rosbank market situation study board.

    "The growth of gold and currency reserves is prompted by the favourable price situation regarding Russian exports - metal and oil," believes Denis Nushtaev of the Metropol investment company.

    In the opinion of Igor Vasiliev, head of the Alfa-Bank monetary operations board, this growth may also be affected by the revaluation of gold and the euro in the Central Bank portfolio. "The increase in the reserves does not mean it is due to only the Central Bank's purchases on the currency market," he said. And specified that the main reason is the Central Bank's interventions on the exchange market.

    Now the Central Bank is buying the US currency at tenders at 28.485 roubles per dollar. The bid has been as that for a long time - since January 26. Emerging daily on the market with the bid, the Central Bank toughly restrains participants in "downsizing the dollar". Still, the recent market expectation is that the Central Bank will lower the rate. It is the unanimous opinion of the dealers recently polled by the agency.

    "The Central Bank is under a heavy pressure from the market. Soon it is to abandon the 28.485 rouble rate and set it at a 10 to 15 percent lower rate," Suprunov believes. "The strengthening of the rouble is useful for Russia because other currencies are being ousted from the Russian economy," he added.

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