Page 47 - RUSRptSept18

After president Vladimir Putin promised to add an extra RUB2 trillion a year of social and infrastructure spending to the regular RUB16 trillion a year the Ministry of Finance is on the hunt for new revenues and the NWF has been earmarked as a source for some of the infrastructure investment.
The government is currently debating what to put on the national project list that will be set this year. But some money needs to be kept in reserves in case there is yet another crisis. The federal budget is currently breaking even at $53 per barrel according to Renaissance Capital estimates, well below the average $77.8 per barrel Brent cost in July, but that might change.
Russia halted a shift out of Treasuries held onshore in the US in August after apparently selling $81bn worth in in April. However, it appears that Russia sold less of the treasuries than first appeared and has moved the domicile of some of the ownership of the bonds rather than simply selling the bonds outright.
Figures published on August 16 indicated Russia’s holdings of US bills, notes and bonds were unchanged at $14.9bn in June. The numbers for April and May showed a reduction of $81bn, or about four-fifths of the total, leading to speculation that Russia is dumping American assets to protect itself from the growing risk of harsher US sanctions.
Once among the top 10 foreign owners of US Treasuries, Russia has fallen out of the top 30 biggest holders of US debt and sent mixed signals over what it has done with the cash. Turkey has joined Russia in reducing its T bill holds after it was also hit by US sanctions in August.
Analysts at the Council of Foreign Relations this week found that holdings of American bonds in Belgium and the Cayman Islands increased by about $45bn in the same period that Russia was reducing its US-based hoard, meaning it may have been an attempt to protect against seizure.
Russian central bank data shows that the country’s total stock of foreign securities actually increased by about $11bn in June. But its not clear whether any of that number includes Treasuries and how much of the increase is due to fluctuations in the exchange rate.
For the period of March to May, the data show a drop of about $50bn, suggesting that Russia probably did sell some Treasuries, just not as much as it seemed at first glance.
47 RUSSIA Country Report September 2018 www.intellinews.com