The Government of Russia has added $3.52 billion to its emergency spending fund, seeking to ensure economic stability amidst Western sanctions.
The sanctions, imposed after Russia invaded Ukraine on 24th February 2022, cut the former off from the global financial system and supply channels.
As Reuters reports, the government has already pledged more than $12.5 billion in anti-crisis support to businesses, social payments and to families with children, which will take up all of this year’s incoming revenues.
The government’s reserve fund is a cash cushion used to cater for unexpected spending not projected in the state budget. Last year, the reserve fund was used for one-off social payments and in fighting the economic impacts of the global coronavirus pandemic.
The Russian government says the main source of the reserve fund’s increase was $3.4 billion in additional energy revenues received in Q1 2022, when oil and gas prices rose in response to the recovery from the impact of COVID-19.
Russia supplies around 40% of the EU’s natural gas consumption, which the International Energy Agency values at more than $400 million per day. Further, the EU gets a third of its oil imports from Russia, which translated to about $700 million per day.
The Russian central bank has already cut interest rates from 20% to 17%, noting that external conditions for the Russian economy are still challenging, considerably constraining economic activity.
