Foreign currency purchases were suspended early this year amid sharp volatility in the value of the rouble in the weeks before Moscow sent tens of thousands of troops into Ukraine.
With the Russian economy tipping into recession this year, Finance Minister Anton Siluanov scrapped the fiscal rule, instead using all of Russia’s energy sales to fund day-to-day government spending.
President Vladimir Putin ordered his government to revise the mechanism – last fixed at a cut-off oil price of $40 a barrel in 2018 – by the end of July.
Economists have hailed the fiscal rule with helping reduce the rouble’s vulnerability to changes in the global oil price and help Russia build up more than $600 billion of international reserves. Around half of the reserves were frozen by Western governments as part of a sweeping sanctions package levied on Moscow.
The finance ministry also proposed to fix Russia’s oil production volume at 9.5 million barrels per day.
The European Union, Russia’s largest energy customer has pledged to cut its purchases of Russian oil by 90% this year and gradually wean itself off Russian gas in response to Russia’s actions in Ukraine.
Excess budget revenues could amount to around 2.5-4.5 trillion roubles ($44-80 billion) under the rule – which would be channelled into the NWF, a sovereign fund designed to go on large investment projects, Vedomosti reported, citing a Raiffeisen Bank economist.
