While Russia’s plunging currency is becoming a growing concern for policy makers in Moscow, the benefits for the Treasury are swelling as it receives more and more rubles for each dollar of oil export revenue.
The CHART OF THE DAY shows that Brent crude sold for an average 3,759 rubles a barrel this year, the most on record, even after the mean dollar price of $101.74 dropped to the lowest since 2010.
Russia's fiscal accounts are benefiting from this year’s more than 40 percent decline in the ruble as it kept pace with a similar slide in oil, which is priced in dollars. The government’s budget surplus is 1.27 trillion rubles ($23 billion) through November, compared with 600 billion rubles in the same period last year and 789 billion rubles in 2012, according to Finance Ministry data. It was 1.34 trillion in 2011.
“A weak ruble is good for the government budget,” Dmitry Postolenko, a money manager at Kapital Asset Management in Moscow, said Dec. 10 by e-mail. “It’s in the government’s interest to let the ruble devalue but it should do it in a way that will not lead to a panic among Russians who keep money in rubles.”
The Russian currency slid 2.8 percent against the dollar on Dec. 11, touching a new record low of 56.44, after the central bank raised interest rates by one percentage point, less than some traders were predicting, and oil fell to a five-year low.
The central bank stands ready to take unorthodox steps if the situation worsens, central bank Governor Elvira Nabiullina said after the decision, without elaborating.