Russia’s government has committed $3.52 billion to its emergency expenditure fund in order to maintain economic stability in the face of Western sanctions.
Following Russia’s invasion of Ukraine on February 24, 2022, sanctions were imposed, cutting Ukraine isolated from the global banking system and supply networks.
According to Reuters, the government has already committed more than $12.5 billion in anti-crisis assistance to enterprises, social payments, and families with children, which will consume all of this year’s revenues.
The government’s reserve fund is a cash reserve that is utilized to cover unforeseen expenditures that are not anticipated in the state budget.
The reserve fund was used last year for one-time social payments as well as to combat the economic effects of the global coronavirus pandemic.
The Russian government says the main source of the reserve fund’s increase was $3.4 billion in additional energy revenues received in Q1 2022, when oil and gas prices rose in response to the recovery from the impact of COVID-19.
Russia supplies around 40% of the EU’s natural gas consumption, which the International Energy Agency values at more than $400 million per day.
Further, the EU gets a third of its oil imports from Russia, which translated to about $700 million per day.
The Russian central bank has already cut interest rates from 20% to 17%, noting that external conditions for the Russian economy are still challenging, considerably constraining economic activity.
