Russian state wealth Fund has sufficient reserves to cover the budget deficit for many years, even if oil prices will remain at 25 to 30 dollars per barrel.
This was stated by the Ministry of Finance on the background of the sharp collapse of the oil market, reports “Hvil”.
Despite the fact that Monday was a holiday in Russia, and the Ministry of Finance and the Central Bank responded quickly to the falling oil prices of almost 30 percent in one night.
The Ministry of Finance said that the Russian national welfare Fund has liquid assets worth 150 billion dollars (10 trillion rubles) due to additional revenues from oil and gas, which is sufficient to compensate for the possible deficit from the fall in oil prices in the period of 6-10 years.
The turmoil in the oil market has fallen off the national currency of Russia, which fell sharply against the U.S. dollar and the Euro. The ruble has fallen by about eight percent, trading at level 74,1 per dollar on Monday morning. Against the Euro the ruble was at the level of 84.4 per, the weakest since the end of February 2016.
The Central Bank of Russia announced that it is temporarily suspending the purchase of foreign currency on the domestic market in accordance with the fiscal regulation mechanism. The regulator said that 30-day pause is designed to reduce the volatility of the financial market, adding that he is ready to take additional measures to ensure financial stability of the country. The resumption of operations will depend on how the situation will develop in March.
In turn, before members of OPEC and allied oil producers met last week, Russian President Vladimir Putin said that while Moscow should be ready for any scenario, she has enough reserves to stay afloat, even if the situation will continue to deteriorate. However, at that time, oil prices were higher.
Russia’s Finance Minister Anton Siluanov said earlier that the Russian economy can withstand an oil price of about $ 30 per barrel, but noted that it would not be optimal for balancing the budget.
According to Reuters, was the most significant one-day decline in oil prices since 1991, when the war began in the Persian Gulf.