Balance of forex bought on market will go into Reserve Fund at end of 2017 - minister
MOSCOW. Feb 7 (Interfax) - Russia's Finance Ministry, while purchasing forex with additional oil and gas revenues in 2017, will also spend Reserve Fund money to finance the budget deficit, but the balance on forex accounts at the end of the year will be transferred to the fund, Finance Minister Anton Siluanov said at a meeting of the Public Council.
"We reserve the right to use the Reserve Fund in the amount factored into the budget. Nonetheless, with the additional oil and gas revenues that we will get, we will participate in the forex market. Perhaps there will also be a situation when we will have to use the resources of the Reserve Fund with simultaneous purchases of forex on the forex market," Siluanov said.
"At the beginning of next year, according to current legislation, all balances will go into the Reserve Fund and replenish it," Siluanov said.
"We agreed with the Central Bank to have the Treasury and Finance Ministry participate in the forex market independently. Fundamentally, it is the same as if we did not spend the Reserve Fund and the Central Bank bought forex for itself in its gold and foreign currency reserves," Siluanov said.
The minister said that February 7 was the first day the Finance Ministry would participate in the forex market. "We are talking about needing to do something with the additional oil and gas revenue we receive. A decision was made by the country's leadership that all additional oil and gas revenues we receive above $40 per barrel would not be spent but allocated toward fulfilling the Reserve Fund...We agreed that we would buy forex with these funds, that we would do this very carefully in order to not create consequences for volatility in the ruble's exchange rate, and essentially allocate it into the Reserve Fund," Siluanov said.
"We are saying that a fiscal rule needs to be implemented in terms of amendments to the budgetary code. We are preparing those amendments now, discussing them in government, and afterwards we will bring them out for public review. The essence of the fiscal rule will consist in defining the maximum possible amount of spending we could cope with under any kind of external economic environment without cuts," he said.