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Russia adds 551.4 billion roubles to emergency reserve fund

Russia adds 551.4 billion roubles to emergency reserve fund

Russia adds 551.4 billion roubles to emergency reserve fund

Russia adds 551.4 billion roubles to emergency reserve fund credits google

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  • The Russian government has added $9.5 billion to its emergency reserve fund.
  • Extra revenues from oil and gas exports have contributed to the increase in reserves.
  • Russia’s economy is on the verge of its worst downturn in two decades, with inflation at highest level in 20 years.
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On Thursday, the Russian government added 551.4 billion roubles ($9.5 billion) to its emergency reserve fund as part of a broader stimulus package aimed at shielding the economy from the effects of Western sanctions and its operations in Ukraine.

In a statement announcing the cash injection, the government said, “The monies will be utilised in part to pursue measures aimed at ensuring the stability of economic development in the face of external restrictions.”

The extra revenues created by Russia’s essential oil and gas exports, which are pouring in hundreds of millions of dollars per day to the government despite Western sanctions, contributed to the increase in reserves.

After Moscow launched tens of thousands of troops into Ukraine on Feb. 24 in what it terms a “special military operation,” Western countries struck Russia with an unprecedented package of sanctions, including freezing approximately half of the central bank’s gold and foreign currency holdings – or $300 billion.

Oil and gas income were formerly routed to Russia’s $198 billion national wealth fund, a rainy-day fund intended to bankroll huge investment projects.

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The emergency reserve fund, on the other hand, is a more flexible pot of money that allows the government to plug its own deficit, support social outlays like the recent emergency pension boost, and respond to the looming economic catastrophe.

In May, the government increased the fund’s size by 791.6 billion roubles ($13.56 billion).

Russia’s economy is on the verge of its worst downturn in more than two decades, as it risks a “complete breakdown of 30 years of investment” that could wipe out 15 years’ worth of economic advances, according to the Institute of International Finance.

In an attempt to alleviate an economic crisis that has already seen inflation surge to its highest levels in two decades and is projected to see household earnings plummet in the coming months, the Kremlin has already begun deploying its resources to support the country’s top firms.

Russian Railways, the country’s largest employer, received a $4 billion injection from the government in May, while the government has offered $1.75 billion for state-owned carrier Aeroflot.

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