The Russian government said on Sunday it has increased its reserve fund used for emergency spending by 273.4 billion roubles ($3.52 billion) to ensure economic stability against the backdrop of Western sanctions over Ukraine.
The sanctions, imposed after Russia invaded Ukraine on Feb. 24 in what Moscow describes as a “special military operation”, cut Russia off from the global financial system and supply channels.
Western nations are also moving closer to a complete ban on energy from Moscow to strip the Kremlin of its biggest source of revenue.
The government has already pledged more than 1 trillion roubles in anti-crisis support to businesses, social payments and to families with children, which will take up all of this year’s incoming revenues, so there will be no budget surplus.
“The funds, among other things, will be used to implement measures aimed at ensuring economic stability in the light of external sanctions,” the government said in a statement on Sunday.
The government’s reserve fund is a cash cushion to be used for unexpected spending that was not projected in the state budget. Last year, it was used for one-off social payments and to fight the pandemic.
The government said the main source of the reserve fund’s increase was 271.6 billion roubles in additional energy revenues received in the first quarter, as oil and gas prices rose in response to the recovery from the impact of COVID-19 and the Russia-Ukraine conflict raised the risk of disrupted supply.
Russia supplies around 40% of the European Union’s natural gas consumption, which the International Energy Agency values at more than $400 million per day. The EU gets a third of its oil imports from Russia, about $700 million per day.