Drop in oil prices cost each Russian $965
A drop in oil prices cost Russia $965 of gold and foreign exchange reserves per person to cope with the risks of devaluation of national currencies, the Izvestia newspaper reported with reference to the research data of FinExpertiza.
It is reported that by mid-2017 the Russian Federation coped with these risks better than many oil-producing countries. For example, Saudi Arabia spent $3.6 thousand, Qatar - $2.8 thousand, and Norway - $1.4 thousand.
In addition, it became known that in the period of low oil prices, the Bank of Russia's gold and foreign exchange reserves decreased by $142 billion. The publication specifies that the funds were used to support the ruble exchange rate through foreign exchange interventions.
Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, noted that the decline in Russia's gold and foreign exchange reserves could hardly be less in those days when oil prices plummeted. "The reason why the Central Bank spent international reserves was fairly objective: Russian companies had debts to foreign creditors at that time and were forced to repay it," he pointed out.
"Incidentally, it is confirmed by the fact that the decline in reserves was observed in all countries that had a large share of oil and gas revenues in their budgets.The differences in spending of reserves per capita in our country and in other countries can be explained quite simply: we have a larger population. As for the scale of oil exports, only Saudi Arabia resembles us, but the population of Russia is about five times larger than the population of Saudi Arabia, and the expenditure is four times less, " Sergey Hestanov concluded.
A professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, in turn, is confident that the Central Bank's support of the ruble exchange rate in 2014 was unjustified. "Until the end of 2014, Russia tried to support the ruble through foreign exchange interventions and the Central bank spent a significant part of the reserves. In addition, gold and foreign exchange reserves were spent to cover the budget deficit, which could be avoided with a more severe budget cuts, especially in defense and law enforcement agencies," Alexander Abramov drew attention.
At the same time, all these steps proved to be impracticable from the political point of view. "The same cutbacks in defense spending contradicted more serious geopolitical attitudes," he noted.
The difference in spending per capita he also explained by current socio-economic policies. "In Russia, the new conditions have had a more severe impact on the population. We see how big is decline in real incomes of our population. On the one hand, Russian economy has become more diversified than the countries of the Middle East, but, on the other hand, our population paid for declining oil prices in the past years with its revenues," the professor at the department of the stock market and investments at the Higher School of Economics concluded.