Russia's foreign currency reserves fell by $1.8 billion by March 5 reflecting the central bank's efforts to curb the rouble's volatility in the run up to next Sunday's presidential election.
The central bank said in a statement on Thursday that Russia's gold and foreign currency reserves fell to $84.6 billion from $86.4 billion the week before, when the reserves fell by $300 million. It gave no explanation for the fall.
Analysts attributed the decline to the central bank's dollar selling interventions when the Russian currency started to slide against the dollar in response to a sharp rise in the US currency on global markets last week.
"The decline in reserves was expected given the central bank's attempt to reduce rouble volatily after it weakened on the back of the euro/dollar correction," Stanislav Gelfer, an analyst at 4Cast said.
According to dealers' estimates, the central bank, which usually moves fast to curb what it judges to be a excessive exchange rate volatility, spent at least $1 billion from its reserves last Wednesday alone.
It kept its interventions to a minimum this week as the rouble hovered in the middle of the 28.48-28.69 corridor, set up by the central bank about two weeks ago when President Vladimir Putin opted to reshuffle his cabinet ahead of Sunday's poll.
Despite the fall, reserves have risen $7.7 billion since the start of the year helped by Russia's booming oil exports, heavy corporate borrowing abroad more Russians converting their savings into roubles.
"Last week reserves fell because of technical and speculative factors prompted by the fall of the euro and it is not a cause for concern because we saw no major capital outflows," Vladislav Oreshkin, an economist at UFG said.
"We are likely to see a resumed rise (of reserves) this week as fundamental factors - like global oil and commodities prices - remain intact."
Analysts expect that Russia's reserves could be dented by $2.5 billion foreign debt payments due in the second half of March which may prompt the central bank to buy dollars from the market and thus contain the rouble's strength.