Dealers are tired of dollars
For the third day in a row, during the morning currency session, the Central Bank was forced to repel attacks from buyers. During this time, the volume of funds in correspondent accounts of commercial banks with the Central Bank decreased by almost 2 billion rubles, to 46.8 billion—most of this money went to purchase dollars. This is noticeably less than the approximate volume of Central Bank interventions, but it must be taken into account that part of the funds was resold on the over-the-counter market. However, yesterday, compared to the end of last week, things were a little easier for the Central Bank. The pressure of buyers weakened: in the morning session the volume of purchase orders amounted to only $300 million with an equal supply volume ($302 million). And at the beginning of the session, it seemed that the excitement of the previous days had subsided - the dollar rate was slowly going down. But a quarter of an hour later, active purchases of foreign currency began again, and the Central Bank had to re-establish the usual foreign currency sales rate - 24.75 rubles/$. True, this time it took less currency to contain the market - about $80-100 million. And at the end of the morning session, the Central Bank was just in time to buy back the currency - the dollar exchange rate fell to 24.72 rubles/$. The convergence of the rates of the morning session and the over-the-counter market have significantly narrowed the opportunities for arbitrage transactions. And non-resident participants have probably weakened the pressure, which was facilitated by the latest initiative of the Central Bank. On Friday, the Board of Directors of the Bank of Russia decided to hold two more currency auctions (see material on page 7). In the next two months, Western investors will have the opportunity, in addition to the previously purchased $200 million, to buy back another $100 million. It is worth noting that even taking into account previous auctions, this will amount to no more than 5% of the amount of funds frozen in August last year.
According to traders, the behavior of the Central Bank is explained by the ongoing visit of the IMF mission to Russia. And it is likely that thanks to multi-day foreign exchange interventions by the Central Bank and after the departure of the mission, the ruble exchange rate will decrease slightly or will not change at all.
Once again, the government bond market responded to the ongoing tension in the foreign exchange market. At yesterday's trading on the MICEX, quotes for most issues dropped by 0.5-0.8 percentage points. The yield on long-term securities increased to 80-81% per annum, and the shortest 22nd series of OFZs - to 57.6% per annum. The trading volume was less than 75 million rubles.

Newspaper "Kommersant" No. 156 dated 08/31/1999, p. 8