War without money: as invasion of Ukraine and sanctions undermine the financial potential of the Russian Federation

The highly liquid part of the national welfare fund, which consists of monetary and investment assets, at the end of 2023 was 5 trillion rubles ($ 56. 5 billion) against 8. 9 trillion rubles to a full -scale invasion. The full -scale war against Ukraine forces Russia to spend a lot of financial resources. Now, to protect its economy from the consequences of the war, Moscow has been spending strategic financial reserves that it has accumulated over many previous years.

As Bloomberg writes from the National Welfare Foundation (FNB), which was formed in 2008, almost half of highly liquid reserves were spent in 2008. It is noted that it was the highly liquid part of the FNB, which consists of monetary and investment assets, at the end of 2023 was 5 trillion rubles ($ 56. 5 billion) against 8. 9 trillion rubles to a full -scale invasion.

The financing of the rest of the national welfare fund, consisting of less liquid assets (shares of Russian companies, bonds) increased by almost 2 trillions of rubles. Now the size of the low -liquid FNB is much higher than the highly liquid, although the full -scale was the opposite. "The total size of the FNB looks completely unimportant now, since much of it has been invested in Russian stocks and infrastructure - in fact, illiquid investments.

Only liquid investment can be considered as stocks for a rainy day, the rest is lost," Oxford Economics was lost to journalists . Previously, the Kremlin actively filled the fund with money received from oil and gas exports. This is happening now, but because of the sanctions of the event, energy sales are no longer generated, it is not enough even to meet the current budgetary needs.

Russian economist Alexei Isakov believes that a sharp rise in oil prices through events in the Middle East can correct the situation. This will help Moscow restore the FBN money stable. But if this does not happen, then the remains of highly liquid assets of the Russian FNB will continue to be reduced, and Russia will become very vulnerable to shocks. Isakov says that Russia will fully spend money in one or two years, if the export price of Russian oil will cost less than $ 50.

According to the data of the Russian Ministry of Finance, the average price of the reference Russian oil Urals last year became cheaper by 17% and traded 63 dollars per barrel. According to Bloomberg, the FNB of Russia will be depleted in 2024, provided that the price of oil will not exceed the 73 dollars.