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Russia is trying to save the budget. It falls into a vicious circle

Russia is trying to save the budget.  It falls into a vicious circle

Russia is trying to save the budget. It falls into a vicious circle

Russia’s finance ministry and central bank said last week that they would resume foreign exchange interventions for the first time in nearly a year, selling 54.5 billion rubles (about $793 million) in yuan. The sale started on January 13 and will run for three weeks.

Russia is using the $186.5 billion rainy day fund as of December 1 to finance its growing budget deficit and stabilize the economy in the face of increasingly tougher Western sanctions on Russian energy sales.

However, analysts say the sale of foreign currency will cause the ruble to strengthen, further reducing Russia’s ruble earnings as oil and gas export revenues are largely based on global dollar reference prices.

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