Support The Moscow Times!

Russia Funnels More Billions Into its Sovereign Wealth Funds

The National Welfare Fund grew by 61 billion rubles, or 2 percent, over August to reach 3.15 billion rubles ($85.3 billion) on Sept. 1.

Russia's two oil revenue-funded sovereign wealth funds swelled by 353.3 billion rubles ($9.4 billion) last month to reach combined reserves of 6.54 trillion rubles ($177 billion), boosting the state's financial firepower as the West applies the economic screws on Russia over the Ukraine crisis.

Russia's Reserve Fund, which hoards U.S. dollars, euros and pounds sterling to insulate Russia against falling oil and gas prices, had assets worth 3.4 trillion ($91.7 billion) on Sept. 1, up 292 billion rubles, or 9.4 percent, from the start of August, according to the Finance Ministry.

The National Welfare Fund, which is designed to backstop Russia's pensions system and has a freer reign to invest in infrastructure and business, grew by 61 billion rubles, or 2 percent, over August to reach 3.15 billion rubles ($85.3 billion) on Sept. 1.

Both funds are financed from taxes on sales of oil and gas, and are meant to safeguard the long-term stability of an economy currently mired in difficulties. Though oil prices — the lynchpin of Russia's commodity-driven economy — remain high, Western sanctions on Russia over its policies in Ukraine have exacerbated a slowdown and pushed the country to the brink of recession in recent months.

However, the budget is still balanced and the Central Bank is sitting on reserves of nearly half a trillion dollars, an amount that includes the parts of the Reserve Fund and the National Welfare Fund held in foreign currency.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more