RUSSIA is to diversify further its foreign exchange reserves, the world’s third-largest, and will begin to add the yen to its currency stockpile, its central bank said yesterday.

With Russia’s reserves expanding rapidly thanks to huge inflows of funds generated by being the world’s second-biggest oil exporter, the central bank said it wanted to widen the range of currencies it holds.

Record oil prices have combined with Russia’s energy riches to swell its foreign exchange holdings by 54 per cent this year, so that its total reserves are outstripped only by those of China and Japan.

Sergei Ignatyev, the central bank’s chairman, said that about half the total reserves were held in dollars, with the bulk of the rest in euros. Holdings of yen were close to zero.

Alexei Ulyukayev, the bank’s first deputy chairman, said that, as of next year, yen would be increased as a proportion of the total reserves, while Russia would build stocks of other currencies, including the Australian and Canadian dollars. This could apply some downward pressure to the US dollar.

The central bank’s reserve corresponds to that of Russia’s $71 billion oil stabilisation fund, created in 2004 to cushion the national budget against any fall in oil prices, the bank said.

At present about 45 per cent of new funds is being invested in dollars, 45 per cent in euros and 10 per cent in sterling.

The precise composition of the total reserve is secret, but in July Mr Ignatyev said that the proportion of US dollars in the total had been cut to 50 per cent and euros increased to 40 per cent — suggesting that Russia had been selling dollars to buy the euro, adding to upward pressure on the latter.

Mr Ulyukayev said that the central bank had bought more than $100 billion (£53.7 billion)from the currency markets this year to prevent too strong an appreciation of Russia’s rouble.

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