Home Finance Russia eases rules on using rainy day fund to buy stocks, bonds

Russia eases rules on using rainy day fund to buy stocks, bonds

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Russian rouble cash are seen on this illustration taken, February 24, 2022. REUTERS/Dado Ruvic/Illustration

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MOSCOW, March 4 (Reuters) – Russia’s parliamenton Friday handed a regulation that makes it simpler for the federal government to make use of the nation’s Nationwide Wealth Fund (NWF) to purchase shares of Russian firms and authorities bonds as an anti-crisis measure.

On the lookout for methods to help markets damage by Russia’s invasion of Ukraine and Western sanctions, authorities are planning to spend the NWF cash on shopping for Russian securities in a transfer much like what they did in 2014 when Russia annexed Crimea.

The brand new regulation permits the wet day fund for use to purchase shares and bonds even when its liquid portion drops beneath 7% of gross home product (GDP).

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The federal government is at the moment solely permitted to spend cash from the fund when its liquid belongings exceed 7% of GDP, however Russian authorities are scrambling to restrict the injury executed by unprecedented Western sanctions.

The parliament, known as the Duma in Russian, mentioned the eased necessities have been a part of a set of legal guidelines designed to make the Russian financial system and households extra resilient within the face of sanctions.

As of Feb. 1, the liquid belongings of the NWF stood at $112.7 billion, or 8.8 trillion roubles, equal to six.6% of GDP projected for this yr. learn extra

Russia calls its actions in Ukraine a “particular operation” that it says is just not designed to occupy territory however to destroy its southern neighbour’s army capabilities and seize what it regards as harmful nationalists.

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Reporting by Reuters in Moscow; modifying by John Stonestreet and Jason Neely

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