(Reuters) – The Russian government said on Sunday it had boosted its reserve fund used for emergency spending by 273.4 billion rubles ($3.52 billion) to ensure economic stability amid the Western sanctions against Ukraine.
The sanctions, imposed after Russia invaded Ukraine on February 24 in what Moscow describes as a “special military operation”, have cut Russia off from the global financial system and supply channels.
Western countries are also moving closer to a total energy ban from Moscow to deprive the Kremlin of its biggest source of income.
The government has already pledged more than 1 trillion rubles in anti-crisis support for businesses, social payments and families with children, which will absorb all incoming income this year, so there will be no surplus budgetary.
“The funds, among other things, will be used to implement measures to ensure economic stability in light of external sanctions,” the government said in a statement on Sunday.
The government reserve fund is a cushion of cash to be used for unforeseen expenses that were not provided for in the state budget. Last year it was used for one-time social payments and to fight the pandemic.
The government said the main source of the increase in the reserve fund was 271.6 billion rubles of additional energy revenues received in the first quarter, as oil and gas prices rose in response to the recovery after the impact of COVID-19 and the Russian-Ukrainian conflict has increased the risk of supply disruption.
Russia provides around 40% of the European Union’s natural gas consumption, which the International Energy Agency estimates at more than $400 million per day. The EU receives a third of its oil imports from Russia, or about $700 million a day.
($1 = 77.7500 rubles)
(Reporting by Reuters; Editing by Angus MacSwan and Barbara Lewis)