Russia may raise National Wealth Fund’s liquid part to 10% from 7%

MOSCOW, Oct 1 (PRIME) -- The Russian Finance Ministry has offered to raise the liquid part of the National Wealth Fund to 10% of the gross domestic product (GDP) from 7% in order to minimize the risks of energy transition, the ministry said in a statement on Friday.

The Budget Code allows Russia to invest National Wealth Fund’s money in the development initiatives when the liquid part, the amount of banks' deposits on accounts with the central bank, exceeds 7% of the GDP.

The Finance Ministry said that falling of the oil price could accelerate in the medium and long term. "The results of stress tests show that in case of fulfillment of the most ambitious scenario of pollution cut, the issue of federal budget stability may arise already at the beginning of the 2030s," the document read.

"To reduce the long-term budget risks from energy transition, we suggest raising the minimum liquid reserves (of the National Wealth Fund) to 10% of the GDP," the ministry said.

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