Banishing the Oil Curse Means Tethering Ruble in Budget Fix
- New budget rule proposes linking spending to $40-$50 oil price
- Finance minister warns budget is source of risks for inflation
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For a country whose management of its oil wealth a central banker once described as being “in the middle between Norway and Nigeria,” Russia seems to have made up its mind.
The world’s biggest energy exporter is looking to the Nordic country with a proposed budget mechanism that would prevent the government from spending surplus revenue above a pre-set oil price. The crude-price cutoff would be in the range of about $40 to $50 a barrel, and income received above that will be stowed away in reserves, Finance Minister Anton Siluanov said in Moscow on Wednesday.