Page 70 - RusRPTApr20

The ruble dropped to its lowest level against the dollar since February 2016 on March 18, following oil prices, which slid below $28, TASS reported. The Russian currency was 3.4% weaker against the dollar, reaching a low of RUB79.22, its weakest level since February 2016. It was down 3.5% against the euro at EUR85.78. The ruble has been one of the worst-performing currencies against the dollar this year, losing almost 18% of its value since late 2019 after a double hit from an oil price slump and a global sell-off due to the coronavirus outbreak. Brent crude oil LCOc1, a global benchmark for Russia’s main export, which has lost more than half of its value in the last month, was down 3.5% at $27.7 a barrel.
Russia could start sales of the foreign currency should oil prices remain below the $42 per barrel threshold of the so-called budget rule regulating the spending, according to the announcement of the Finance Ministry. As reported by bne IntelliNews, after talks between OPEC and Russia in Vienna on a new production cut collapsed on March 6, the oil prices tumbling to under $50, reaching as low as $30, while Russian ruble lost 8% to US dollar as a result, going to the weakest levels since 2016. Russia’s reserves in the National Welfare Fund (NWF) are “sufficient to cover lost revenue if oil prices drop to $25 to $30 a barrel for six to ten years,” the Finance Ministry reassured in the statement. Earlier the Finance Minister Anton Siluanov boasted that Russia has enough money in the NWF to fund budget shortfalls for a decade. Still, this would meant that the recently appointed government would have to clip its pro- growth and social spending agenda, which relied on tapping into the NWF among other extra revenue sources.
70 RUSSIA Country Report April 2020 www.intellinews.com