Ruble Isn't Falling Fast Enough to Save Putin's Rainy-Day Fund
- Nomura says fund will run dry in 2016 without ruble correction
- Central bank governor says any interventions should be careful
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The ruble isn’t falling fast enough to avoid sacrificing Russia’s rainy-day fund, bolstering the case for policy makers to buy dollars to speed up the depreciation.
The currency needs to weaken 13 percent by the end of next year in order for Russia to earn enough from its oil revenue to avoid virtually wiping out the Reserve Fund used to cover budget shortfalls, assuming current prices persist, according to Nomura Holdings Inc. Brent in ruble terms dropped to 2,912 a barrel Friday, a level it hasn’t breached since January 2011. Following a less-severe decline, the central bank started selling the local currency in May to boost waning international reserves, which weakened the ruble.