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"Official data released by Russia’s Ministry of Finance on Monday show that the budget deficit in January was 1.76 trillion roubles (about $36 billion), with revenue from oil and gas nearly halving from their level a year earlier and expenditures swelling 59 per cent, presumably largely because of the cost of the war in Ukraine."
Putin is raiding his piggy bank as his cash woes grow
Posted from smh.com.au
Vladimir Putin
Finance
Oil and Energy
Posted 1 y ago
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LTC Eugene Chu
..."US imports of Russian aluminium have been falling steadily in the past year – less than five per cent of the primary aluminium imported into the US comes from Russia – but the threat of a wider ban would be unsettling given its rapidly deteriorating fiscal position.
Also unsettling would be a review of the price cap on oil (and planned regular review of the new caps on refined products), which could see the cap lowered, giving even more leverage to potential buyers.
To blunt the impact of the slump in its revenue base Russia is raiding its sovereign wealth fund, which had assets of about $US148 billion ($215 billion).
The finance ministry said it would sell about 160 billion roubles over the next month. It sold 38.5 billion roubles worth of Chinese yuan and gold from the fund last month. It also plans to issue about 800 billion roubles of domestic bonds in the March quarter, increasing its planned full-year domestic debt issuance by that amount.
Even though it has been denied access to international debt markets by the West’s sanctions, and lost access to central bank reserves held in the West, Russia can draw on its sovereign wealth fund and the domestic market to maintain the funding for the war in Ukraine for quite some time.
That is, however, now coming at a significant and increasing cost and the likely long-term outcome – the loss of the largest and closest pre-war market for its energy exports, the depletion of its reserves and the damage done to its economy by Western sanctions and the withdrawal of Western companies – will weigh heavily on its future."...
..."US imports of Russian aluminium have been falling steadily in the past year – less than five per cent of the primary aluminium imported into the US comes from Russia – but the threat of a wider ban would be unsettling given its rapidly deteriorating fiscal position.
Also unsettling would be a review of the price cap on oil (and planned regular review of the new caps on refined products), which could see the cap lowered, giving even more leverage to potential buyers.
To blunt the impact of the slump in its revenue base Russia is raiding its sovereign wealth fund, which had assets of about $US148 billion ($215 billion).
The finance ministry said it would sell about 160 billion roubles over the next month. It sold 38.5 billion roubles worth of Chinese yuan and gold from the fund last month. It also plans to issue about 800 billion roubles of domestic bonds in the March quarter, increasing its planned full-year domestic debt issuance by that amount.
Even though it has been denied access to international debt markets by the West’s sanctions, and lost access to central bank reserves held in the West, Russia can draw on its sovereign wealth fund and the domestic market to maintain the funding for the war in Ukraine for quite some time.
That is, however, now coming at a significant and increasing cost and the likely long-term outcome – the loss of the largest and closest pre-war market for its energy exports, the depletion of its reserves and the damage done to its economy by Western sanctions and the withdrawal of Western companies – will weigh heavily on its future."...
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