The stash of liquid property in Russia’s nationwide wealth fund has fallen over 44% since Moscow invaded Ukraine, in keeping with a Bloomberg report of Russian finance ministry knowledge on Wednesday.
The quantity of property that may be simply liquidated underneath Russia’s Nationwide Wellbeing Fund fell from 8.9 trillion rubles, or $100.4 billion, to five trillion rubles within the two years from January 2022 — the month earlier than the invasion — to December 2023, in keeping with Bloomberg.
In the meantime, the nationwide wealth fund’s whole holdings tumbled 12% over the identical interval.
The large stoop within the nationwide wealth fund’s liquid property got here as its holdings in Russian corporations and in infrastructure bonds surged by 2 trillion rubles, per Bloomberg calculations. This means the state is utilizing its liquid reserves to help the financial system.
Russia’s finance ministry additionally used round 3 trillion rubles from the fund to cowl its finances deficit in 2023 after it doubled protection spending in the identical interval.
Russia might be operating out of money and time quickly because it retains funding the battle in Ukraine, which is quickly heading into its third yr.
Whereas Russia’s financial system nonetheless seems resilient, it’s coping with a swathe of Western sanctions and weak worldwide oil costs which have fallen about 10% over the previous 12 months. Russia’s flagship Urals crude oil was exported at a mean worth of $62.99 a barrel final yr — down 17% from a yr in the past, in keeping with the finance ministry.
Alex Isakov, an economist at Bloomberg Economics, mentioned Russia’s nationwide wealth fund’s liquid property will final for one more yr or two if the nation’s oil export costs fall beneath $50 a barrel.
“If oil costs proceed to disregard the dangers of provide disruption from the Israel-Hamas battle, the remaining inventory of the NWF’s liquid property will proceed to dwindle, making Russia more and more susceptible to shocks,” mentioned Isakov.
