Russia pushes ahead with ruble free float plans

MOSCOW, Aug 18 (AFP) : Russia's central bank announced Monday it would intervene less in the foreign exchange market to support the ruble as it works toward letting the currency float freely by the end of the year.
Despite considerable turbulence in the markets due to the crisis in Ukraine and Western sanctions against Russia, the central bank said it had widened the range in which the ruble trades freely and that it would no longer intervene to smooth volatility within that range.
It also reduced the amount of its intervention, from $1 billion (747 million euros) to $350 million, before shifting the value of the ruble's trading band.
The Bank of Russia said "the above-mentioned changes are carried out as part of the transition to an inflation-targeting regime," which it noted requires "abandoning any measures to manage the exchange rate".
Most Western central banks set an inflation target and adjust interest rates to try to ensure gradual increases in prices, leaving the currencies to float freely.
"The Bank of Russia plans to complete the transition to a floating exchange rate regime by the end of 2014," it added in a statement.
The central bank added it expected the changes "will not have a significant impact on current ruble fluctuations" given the Russian currency has been trading in the middle of its band.