The Ministry of Finance will refuse to buy foreign currency for oil and gas super profits

The authorities will not be buying foreign currency for oil and gas windfalls in the coming months, as the budget rule prescribes. This was reported to Vedomosti by a source familiar with the plans of the Ministry of Finance, the information was confirmed by a source close to the government. Additional funds from the sale of oil and gas are expected to be received in August, one of them specified. The source did not name a specific amount. According to the modified rule, the Ministry of Finance, with the help of the Central Bank, buys yuan and gold into the National Welfare Fund (NWF) in situations where incomes exceed the base level set for the month. Otherwise, reserves are sold for the amount of the difference between actual receipts and the “base”.

As one of the interlocutors clarified, the decision not to buy foreign currency was made due to the weakening of the ruble – interventions would put unnecessary additional pressure on the exchange rate. Surplus profits will be used to finance the deficit, due to which the pace of use of the NWF will slow down, the source said. Until the end of this year, he does not expect the resumption of the purchase of foreign currency under the budget rule.

The representative of the Ministry of Finance did not respond to a request from Vedomosti. At the beginning of each month, the ministry publishes the expected size of oil and gas revenues and, based on this value, determines the forecast volume of transactions in the market. If, following the results of the previous month, the actual amount of receipts differed from the estimated amount, the size of the upcoming interventions is adjusted for this difference. The agency and the Central Bank returned to the market in January this year. Since then, only yuan sales have taken place, since the actual volume of income was lower than the base.

Moreover, against the backdrop of the weakening of the ruble, from August 1, the Central Bank began to additionally sell foreign currency from the NWF. Operations that were carried out during the year were limited by the volume of falling budget revenues. The Bank of Russia decided to increase sales by the amount of investments from the NWF. The representative of the Central Bank announced this on July 21. The Bank of Russia has set a limit for such operations at the level of 300 billion rubles. For half a year. “If the actual volume of NWF investment for the reporting period exceeds the specified value, the excess is transferred for mirroring in subsequent periods,” the message said. According to the source, this sales volume will not be underestimated by the amount of excess profits received.