The Ministry of Finance: the fed’s decision to raise rates will not affect the budget

MOSCOW, December 17. The fed’s decision about interest rate hike will not affect Russia’s Federal budget and the national currency. This was reported to journalists by the Minister of Finance Anton Siluanov.

“Our finances (budget and national currency rate – approx. ed) will be minimally respond to this change, because we have a fairly stable large reserves, we have reduced the outflow of capital. Yes, indeed, it affected the change in oil prices, because in the face of rising rates the rising value of investments in American assets, oil in this case, oil is cheaper. This change was predictable. To such change we prepared.”, – said Siluanov.

According to him, the fed’s decision on rate on the budget may be affected only indirectly, through the decline in oil prices.

Assessment Of The Bank Of Russia

However, the CBR indicated that the market has already factored in the US Federal reserve’s decision on interest rate increase, which was expected.

“Furthermore, statements by the leadership of the U.S. Federal reserve on the gradual normalization of monetary policy and the decision adds certainty to market participants, which ultimately should contribute to reducing volatility in the financial markets”, said the press service of the regulator.

The U.S. Federal reserve at its last meeting raised the benchmark interest rate by 25 b.p. to 0.25-0.5% per annum.

Basic discount rate the fed last raised in June 2006. From December 2008 to date it has remained almost at zero – 0-0,25%.