Russian FinMin Asks for Sovereign Fund Refill to Curtail Ruble Appreciation
Russian Finance Minister Anton Siluanov commented that Russia should begin the process of replenishing its Reserve Fund to curtail the ruble’s appreciation. An appreciating ruble would likely negatively affect Russian exports. Siluanov pointed out that proceeds from higher oil prices would be the path for Russia to accomplish this. Prices would need to rise above US$ 70 per barrel for this to occur. If global oil prices rise, Russia’s Finance Ministry would then purchase foreign currency for the Reserve Fund. Russia is highly dependent on external factors and its reserves provide a great level of stability for the country.
Russia’s Reserve Fund has functioned as an important tool to cover the country’s budget deficits after sanctions have shuttered Russia’s access to Western financial markets. These sanctions have pulled Russia closer to China economically and politically. The Reserve Fund has also provided lifelines to various infrastructure projects across Russia. In May, Siluanov said Russia plans to use 3 trillion rubles (US$ 54 billion) from the Reserve Fund this year.
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