Reserve Fund we have already eaten, the next target is the devaluation of the ruble

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Резервный Фонд мы уже проели, следующая цель-девальвация рубля

In the remaining three weeks of 2017, the Russian government plans to spend all that is left in the contingency Fund. Next year will begin to actively drain on the reserves Fund. The devaluation of the ruble difficult but inevitable step, because all the savings have been made in foreign currency, and they plan to spend in rubles.

While the people from the TV to captivate the Olympics and presidential elections, the Russian investment bankers are preparing for the worst.

That would end the new year holidays, Olympics, elections will be held and the people surprised to look at the situation in their pockets.

“This year, we make full use of the Reserve Fund, as stipulated by the budget law,” – said Siluanov.

According to the document, just needs to be allocated to 1.06 trillion rubles. This amount is more than the actual size of the Fund, but the situation can be improved December the weakening of the ruble: assets of the Reserve Fund is invested in foreign currency (dollar, Euro and British pound), while its ruble size thus increases with devaluation.

The Ministry of Finance the desired growth rate of the currency basket 6.8%: this corresponds to the jump of the dollar 4 rubles, up to 63.3 ruble and Euro – 4.4 rubles, to 73,8 rubles.

But that’s not the end of the world, there is still national welfare Fund.

Next year, the speed of NWF spending will almost double, according to the budget law, which was signed by Vladimir Putin in mid-week: all of the Fund will take 1,113 trillion rubles.

On January 1 NWF will remain 3.7 trillion rubles, Siluanov said. However, more than a third of that sum 1.4 trillion is already spent.

I had unplanned to Finance unprofitable megastrike – 200 billion roubles and 6.25 billion U.S. dollars, 3 billion dollars went to buy Eurobonds of Ukraine in an attempt to keep the power of Viktor Yanukovych two months before his overthrow and flight from the country, 279 billion roubles was invested in the capital of the Russian state-owned banks.

The situation can only balance the weakening of the ruble to a level of 64 to the dollar with oil at 50 a barrel. Then the budget could receive additional funds that will come into the Fund,thus exceeding the expenditures from it.

But this is only if nothing will happen unplanned.

And unplanned has happened, so again, everything will have to be revised.

Most likely the new package of US sanctions with a ban on investment in Russian state debt will be introduced in the near future.

Although the sanctions themselves – is almost a done deal, and it is hoped that the costs included in the budget, the devil is in the details. Whether the prohibition to apply to all releases of Federal loan bonds, or only for the new, says the publication finanz.ru

If the sanctions only ban new investments, the budget will not receive about $ 15 billion.

In the case of a total ban, it would be “a serious shock”, in this case, the capital outflow will be twice that – $ 35 billion. The same amount in rubles will have to purchase a non-resident, to fully withdraw from the market and collapse all investments in OFZ (2.2 trillion roubles).

If the market will take 10% of the investment (220 billion rubles), the ruble lost 10% against the dollar, a rate which exceeds 68 rubles. If the demand for currency will be presented simultaneously, to avoid a rapid devaluation of the ruble would be impossible. The authorities will have to spend the last reserves in the form of the national welfare Fund.

However, the main blow, as always, will have on the ruble.

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