Emma O’Brien
October 14, 2010

Russia’s international reserves rose to the highest in two years last week as the strengthening euro bolstered the world’s third-largest foreign currency stockpile.

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Reserves jumped $6.7 billion to $501.1 billion, Russia’s central bank said in a statement on its web site today. It’s the first time the reserves have broken $500 billion since mid- October 2008, a month after the collapse of U.S. brokerage Lehman Brothers Holdings Inc. triggered the global credit crisis.

“This is only because the euro moved so much,” Alexey Moiseev, chief economist and head of research at VTB Capital, the investment banking arm of Russia’s second-largest bank, said by phone in Moscow today. “Russia will give up the 500 level as soon as the euro starts to pare back its gains.”

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The euro climbed 1.1 percent against the dollar last week, its fourth straight week of gains, as investors shunned U.S. assets amid concern the economic recovery will slow and the Federal Reserve may ease monetary policy further. Euros account for 41 percent of Russia’s reserves, while dollars constitute 47 percent, British pounds 10 percent, Japanese yen 2 percent, along with a small amount of Swiss francs, First Deputy Chairman Alexei Ulyukayev said in June.

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