MOSCOW - Gold and currency reserves of the Russian central bank amounted to USD118.7bn in the week ending January 21. This is a USD1.4bn fall for the week. The central bank has cut its foreign exchange reserves for a second straight week. The two-week decrease was USD5.9bn, or 5 percent, which is a historic record two-week fall. Thus, the foreign exchange reserves of the central bank retreated to the level of December 3, 2004.

The central bank is actively selling dollars to back the dollar on the domestic market. On January 11 it sold about USD3bn to Russian banks. The central bank is trying to hamper inflation preventing the ruble from excessive strengthening. However, consumer prices grew 1.9 percent in the first 17 days of 2005, as Russian economy minister German Gref announced. In January 2004 the consumer price index advanced 1.8 percent.