“Reserves dropped due to the negative balance of the exchange and the mark-to-market adjustments, Central Banks’s press service says,” according to TASS, Russian news agency.
Russia’s international reserves declined by $6.3 billion to $356.7 billion from February 27 to March 6, 2015, the Bank of Russia said on Thursday.
“Russia’s international reserves are highly liquid foreign assets available with the Bank of Russia and the Russian government and consist of the foreign exchange, special drawing rights (SDR), IMF reserve position, and the monetary gold,” TASS reports.
“Russia’s international reserves declined by $6.3 billion or by 1.7% during the week from February 27 to March 6, 2015. The said reduction was actually fully related to the negative balance of the exchange and the mark-to-market adjustments,” the Central Bank said.
“Russia’s reserves have fallen by more than $100 billion, from $469.9 billion in June, as the collapse in global oil prices sent the Russian currency tumbling.
Russia relies on oil and gas revenue for about 10% of GDP and half of federal budget revenues, so when the price falls, so does the economy.
Morgan Stanley estimates that “every $10 fall in the oil price means a $32.4 billion fall in oil and gas exports, which is equivalent to about 1.6% of GDP and about a $19 billion fall in government budget revenues,” Business Insider reports.
Courtesy of Business Insider
Unfortunately economists still don’t have good news for Russia. The biggest investment houses forecast oil prices are likely to continue deflating this year. Goldman Sachs President Gary Cohn told CNBC on Wednesday he is very concerned about the short-term window for oil. He thinks crude prices could fall to $30 a barrel.
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