The Ministry of Finance proposed to deal with the volatility of the ruble by means of a rule 2004.


According to the newspaper “Vedomosti”, the Ministry of Finance proposed the mechanism if approved, will work after 2018. He suggests that in the case of growth of oil prices above $50 per barrel, the budget should make savings and the government should start buying foreign assets. With prices below $50/bbl. the currency should be sold, protecting the ruble from temporary shocks.

Prior to 2008, the Bank of Russia tried to limit the strengthening of the national currency through intervention in the market, and the Ministry of Finance to save money in the stabilization Fund, said the Deputy head of the Ministry Maxim Oreshkin. However, because of the intervention exceeded the savings, the real rate of the ruble increased the competitiveness of business decreased against the background of rising wages, outpacing the growth of labour productivity. While Norway, provided the necessary budget surplus, managed to preserve the competitiveness of non-oil business, he adds.

According to the head of the Economic expert group Evsey Gurvich, the proposal of the Ministry of Finance actually repeats the first variant of the fiscal rule from 2004. Then the bracket installed in $20 only lasted two years and was increased to $27: the oil prices surged, and with it the appetite. Since 2013, we have introduced a new rule, taking as a benchmark the average price of oil for several years and limiting the deficit 1% of GDP.

… Indicates that the average price mechanism proved ineffective because of long cycles in the oil market.

If the Finance Ministry will save when the price of oil $50/bbl., it really is a tightening of the expenditure side of the budget and ensure control over inflation, says Natalia Orlova of Alfa Bank. Evgeny Gavrilenkov from “Sberbank CIB” reminds that in 2015, when the fiscal rule is not worked, the proportion of oil and non-oil revenue has changed in favour of the latter. “This year again there is no fiscal rule and these proportions will continue to change,” he says.