Russia will boost its state reserves by 273.4 billion rubles from its oil and gas sales, the Kremlin announced on Sunday. The funds, amounting to about $ 3.2 billion, will be used “to implement measures aimed at ensuring the stability of the economy in the face of external sanctions,” the Russian government said in a statement. It will finance the boost in reserves through “additional oil and gas revenues received in the first quarter of 2022,” the statement said. The Russian government’s reserve fund was set up to finance unforeseen expenses and significant measures that were not included in the national budget, according to a Kremlin statement. Russia is an energy power. The country accounts for 45% of the European Union’s gas imports, according to the International Energy Agency. Energy prices soared this year over the war in Ukraine amid fears of a trade break due to infrastructure damage and sanctions against Russia. The EU is trying to wean itself off Russian energy – it bans Russian coal and is considering an oil embargo – but has not mentioned the gas ban. Germany, Europe’s largest economy, is heavily dependent on Russian gas. The EU has paid $ 38 billion for Russian energy since Russia invaded Ukraine, a top EU official said on Wednesday. That contributed to Russia’s foreign exchange reserves, which rose marginally for the week ending April 1, Russia’s central bank said on Thursday. Despite the sweeping sanctions, Russia’s coffers seemed to be holding up. The country was repaying its foreign debt on time until last Monday, when the US Treasury Department blocked the payment of the country in dollars held by US banks. Russia then transferred the money to rubles, which returned to pre-war levels thanks to strict Russian capital controls. S&P Global downgraded Russia’s foreign currency payments to “selective bankruptcy” on Saturday after Moscow owed a dollar-denominated debt in rubles last week. Russia last went bankrupt’s foreign debt in 1917 during the Bolshevik Revolution. The Russian economy is still expected to shrink by 11.2% in 2022, the World Bank said in a report released on Sunday. March revenues from the country’s oil and gas were also 38% lower than the Russian Finance Ministry forecast on March 3, according to ministry figures released on Tuesday. Former chief financial adviser to Russian President Vladimir Putin recently told the BBC that Russia would end the war in Ukraine within a month or two if Western countries imposed a “real embargo on oil and gas exports from Russia”.
