MOSCOW, March 30 (Reuters) - Russia is suspending foreign exchange transactions conducted under the country's budget rule until July 1, the government and the finance ministry said on Monday,
Russia Suspends Foreign Exchange Transactions Under Budget Rule Until July 1
Government Announcement and Economic Context
Official Suspension of Foreign Exchange Transactions
MOSCOW, March 30 (Reuters) - Russia is suspending foreign exchange transactions conducted under the country's budget rule until July 1, the government and the finance ministry said on Monday, clarifying an earlier comment that they were suspended until the summer.
Impact of Oil Prices on Policy Decisions
The move comes partly as result of the rise in oil prices.
Statement from the Finance Ministry
"The decision was taken in the light of planned changes to the base oil price parameter, aimed at improving the sustainability of public finances and strengthening the country's financial system," the ministry said in a statement.
Background: Budget Rule and Oil Revenues
In late February, against the backdrop of falling oil and gas revenues, the finance ministry announced a further reduction in the cut‑off price under the budget rule - the threshold above which excess oil revenues are channelled into a reserve fund used to cover budget deficits.
The planned changes, intended to divert more oil revenues into the National Wealth Fund, prompted the ministry to halt foreign exchange operations in March.
Recent Developments and Future Outlook
However rising oil prices following the outbreak of the Iran war prompted Russia to shelve its plans.
On Friday, Finance Minister Anton Siluanov said that the foreign exchange operations are suspended "until the summer".
Resumption of Operations
When operations resume, the ministry will take into account the volume of foreign exchange transactions suspended since March.
(Reporting by Daria Korsunskaia, Writing by Anna Peverieri and Maxim Rodionov; editing by Alexandra Hudson)
