The volume of the Reserve Fund and national welfare Fund fell to the lowest in four years

The government has resumed spending currency from the Reserve Fund to cover the budget deficit. The Finance Ministry in April sold $2,62 billion €2.30 billion and £0.41 billion from accounts in Bank of Russia. Raised 390 billion rubles were credited to the single account of the Federal budget to Finance its deficit, said today the Ministry of Finance.

As a result, on may 1, 2016, the volume of Reserve Fund has decreased for a month by 15.5% and amounted to 2,89 trillion rubles., and in dollars — by 11.1% (to $44,96 billion).

The volume of the second government “potbelly” — SWF — on may 1 amounted to 4.75 trillion rubles, or $73,86 billion In the amount of the Russian sovereign funds have decreased over the month by 4%, to the lowest dollar level since January 2012 ($118,8 billion), follows from the data of the Ministry of Finance.

Last year, the Ministry of Finance spent from the Reserve Fund at 2.6 trillion rubles, and this year will be spent to cover the budget deficit of about 2 trillion rubles Before 2015 operated fiscal rule, which was allowed to fill the Reserve Fund due to the windfall from oil and gas. But after the collapse of world oil prices the old fiscal rule stopped working: the Reserve Fund ceased to be filled and can now only be spent based on its volume is also affected by exchange rate differences). Now the government is preparing a new fiscal rule, its parameters have not yet been defined.

At the end of 2015, Finance Minister Anton Siluanov warned that 2016 may be the last when it will be possible to spend means of Reserve Fund. “Then we have these resources will not” — he admitted. In February of the imminent depletion of the Reserve Fund, and warned the head of Sberbank German Gref. If the average oil price of $40, “if there will be budget cuts”, but this year will be spent about half of the Reserve Fund, rated, Gref. According to the latest data of the Ministry of Finance, average price Urals in January—April of 2016 amounted to $33.93 per barrel.

The deficit stipulated in the budget 2016, is 2.36 trillion, while in the Reserve Fund at the beginning of 2016 was about 3.6 trillion. When approved by the curtailment of expenditures by 0.5 trillion rubles, and the implementation of the programme of borrowing in the Reserve Fund by the end of the year remains about 1 trillion rubles, said in the report “Russia’s Economy: prepare for a long transition” Natalia Akindinova, Yaroslav Kuzminov, and Evgeny Yasin, the HSE, prepared for the “April conference” Economics.

The expenditure of the Reserve Fund is a kind of “free emissions”, wrote the experts of the Analytical credit rating agencies (ACRA) has on 22 April. At the current rate of utilization of the contingency Fund structural deficit of liquidity in the banking system by the end of summer will be replaced by a structural surplus, says ACRA. According to Bank of Russia estimates, the banking sector can move to a structural surplus of liquidity in the second half of 2016. This means that the banks ‘ need to place free funds in the Bank will exceed their need for refinancing. Excess liquidity may accelerate inflation and have an adverse effect on stock and currency markets, in particular, lead to the weakening of the ruble, analysts warn of an ACRE. The transition to surplus liquidity “can create new risks could trigger excessive interest of banks to risky lending, to purchase risky assets,” said the head of the Central Bank Elvira Nabiullina at the Congress of the Association of Russian banks last month.