Russia will cut forex sales from wealth fund in 2026, central bank head says

MOSCOW, Oct 29 (Reuters) - Russia will cut foreign currency sales from its rainy day National Wealth Fund next year, the central bank's Governor Elvira Nabiullina said on Wednesday, in a move that would weaken support for the rouble.

Forex sales from the NWF are needed to cover the budget deficit, and Nabiullina stressed that a more balanced budget for 2026, which is currently under review in parliament, will be the main reason for lower forex sales.

The central bank handles foreign currency sales for the fiscal reserve fund while also carrying out interventions to smooth out volatility in the forex market. The central bank has been selling forex on a net basis throughout 2025.

The central bank's forex sales, along with high interest rates and a slowdown in imports, have provided support for the rouble, which rallied at the start of the year and remains strong , contrary to the expectations of many economists.

Nabiullina said that Western sanctions, which affect exports and imports flows, have made the rouble exchange rate more volatile. She said that the rouble exchange rate should be market-driven.

"A market-balanced exchange rate balances the interests of different market participants, there are exporters and importers, and they are interested in different movements of the exchange rate," Nabiullina said.