Russia's central bank Wednesday said it expects its gold and foreign exchange reserves to grow at a slower pace than originally planned this year and next, amid a plunge in oil prices and outflow of capital from the country.
In a report on key monetary indicators to 2011 posted on its Web site, the bank said reserves - the world's third biggest stockpile - would likely increase by $70.9 billion to $547.3 billion during 2008, compared with a previous estimate of $156.4 billion.
That would leave a current account surplus of $98.9 billion, based on an average oil price of $101.5 a barrel for Russia's Ural's blend.
Explaining the revision, the bank cited "active removal of foreign capital" from Russia this summer, when ties with the West soured following Moscow's conflict with Georgia, and investors became more nervous on emerging markets in general.
That forced the bank to defend the value of the ruble within in its managed trading range to a basket of U.S. dollars and euros, resulting in a decline in its reserves of more than 10% since August to $530.6 billion.
The bank sees a net $20 billion leaving Russia this year. Some believe its defense of the ruble isn't sustainable.
"We expect the authorities to devalue the currency in a controlled manner in the coming months if capital outflows don't subside," Citi economist Elina Ribakova said in a report Wednesday.
Remembering the 1998 financial crash, many Muscovites already fear a devaluation is imminent and have been busily swapping rubles for dollars over the last week.
The U.S. currency reached its highest level in two years against the ruble Wednesday at RUB26.92, despite little change in the ruble compared with the basket.
For 2009, the central bank has drawn up four possible scenarios for reserves, based on average oil prices of $66, $90, $95 and $115 a barrel.
At $66 - the bank's primary scenario - reserves would decline by $4.0 billion; at $90, $95 and $115, they would rise by $58.9 billion, $69.5 billion and $120.6 billion respectively.
The $66 scenario would result in a current account deficit of $20.3 billion, while the other three would see surpluses of $42.6 billion, $53.1 billion and $104.3 billion.
Analysts at Fitch Ratings Inc. estimate Russia's current account would balance, with oil prices averaging around $63 a barrel in 2009.
"Trends in external refinancing and oil prices and measures being taken by the sovereign to support the private sector will have an adverse impact on its own balance sheet," Fitch wrote Wednesday, reaffirming its BBB+ rating.