Support The Moscow Times!

Official Expects $10Bln Budget Windfall From Weakening Ruble

Steady weakening of the ruble will contribute to inflation, but may also boost revenues to the treasury by $10 billion, a senior finance official has predicted, a news report said Thursday.

Since the federal budget for 2014 assumed an exchange rate of 33 rubles to the dollar, a weaker domestic currency will add a massive surplus to state funds, Deputy Finance Minister Tatyana Nesterenko was cited as saying by Izvestia.

If the exchange rate sticks to at least 35 rubles to the dollar — 2 rubles higher than the assumed exchange — the budget will get 360 billion rubles ($9.98 billion) more than planned, Nesterenko said.

The ruble fell to new record lows in trading on Wednesday, reaching an all-time low of 49.4 rubles against the euro and a five-year record of 36 rubles to the dollar.

A study by Moscow's Higher School of Economics published earlier this week predicted even larger additions to the budget, saying that the ruble could slide further to 37 rubles per dollar by the end of 2014, boosting federal income by $28 billion and pushing the state treasury into surplus.

A devaluation of the ruble lowers expenditures on domestic spending, such as pensions, in comparison to tax revenues generated from commodities priced on the world market, such as oil.

While pushing prices for import, the sliding currency is expected to ease pressure on a government that has had to contend with the prospect of spending cutbacks in coming years amid stagnant growth.

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysiss and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more