Russia’s gross international reserves (GIR) have fallen by $10bn from an all-time high to $611.9bn as of October 1, according to the latest data from the Central Bank of Russia (CBR).
Russia’s reserves surged in September after the International Monetary Fund (IMF) handed out billions of dollars to all its members as part of a $650bn post-coronavirus (COVID-19) support programme. Russia’s share of the global hand-out was 456bn Special Drawing Rights (SDR), the fund’s internal currency, or $18bn equivalent. That increased reserves to their highest level ever, peaking at $620.8bn on September 3.
At the same time, funds in the National Welfare Fund (NWF), Russia’s rainy day fund, increased by $2bn in September to $190.5bn as of October 1, or 12.1% of GDP.
Funds in NWF have risen steadily in recent years as the government squirrels more money away both to protect itself from economic crises and also as a strategic weapon that makes the Russian economy sanction-proof.
And the amount of money in the NWF will grow faster under the new 2022-2024 budget rule being considered by the Duma. The rule that allowed the Duma to spend any of the liquid funds over 7% of GDP in the fund has been changed and the cap raised to 10% in the new budget, which means more funds will be sterilised by sending them to the NWF.
The Ministry of Economy and Finance worry that as a result of the global move to greener economies and the EU’s Green Deal in particular, oil revenues will begin to decline in the coming years and so it intends to continue increasing its reserves while the prices for oil and gas remain high.