Finance Ministry assures Russia to cope with falling oil prices

Finance Ministry assures Russia to cope with falling oil prices

Russia’s Finance Ministry said it would sell foreign exchange reserves in a bid to stabilize the ruble.

“The value of liquid assets of the NWF and funds in the account for additional oil and gas revenues stand at more than 10.1 trillion rubles ($150 billion) or 9.2% of GDP," they said in a statement.

These funds are sufficient to cover the shortfall in income from falling oil prices to $25-30 per barrel for 6-10 years," the ministry added.

Russia’s Central Bank has decided to suspend purchases of foreign currency on the domestic market within the fiscal rule mechanism for 30 days, the regulator said in a press release today.

"The Bank of Russia has decided not to purchase foreign currency on the domestic market within implementation of the fiscal rule mechanism for 30 days. The decision is aimed at making the actions of monetary authorities more predictable and reducing volatility on the financial markets amid major changes on the global oil market. It covers both regular foreign exchange purchases and purchases postponed in 2018," TASS cited the press release as saying.

The decision on resumption of transactions with foreign currency will be made considering the situation on the financial market in March this year, the regulator added.

The Central Bank is monitoring the situation on the financial market, it noted, adding that it is ready to use additional instruments to support stability on financial markets.

As part of the fiscal rule, the Finance Ministry made monthly purchases of currency, using extra revenues received from higher oil price compared with the one priced into the budget, which was allocated to reserves. The Central Bank acts as the Finance Ministry’s agent for currency purchases on the open market.

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