Stabilization Fund of Russia Abolished / News / News agency Inforos
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Stabilization Fund of Russia Abolished

In accordance with the last year amendments to the Budgetary Code that stipulates transition to a three-year planning scheme, the Stabilization Fund is to be abolished as from February 1, 2008.

As from this date the Stabilization Fund is divided into the Reserve Fund and Fund of Future Generations. The sum of the former is 3.069 trillion Rubles and the latter – 767.8 billion Rubles. The key sources to replenish the Funds are revenues from oil and gas export.

According to the new system, initially all resources are to be placed on the account of the Treasury then the non-oil budget income deficit is to be compensated due to so-called oil transfer. Then the Reserve Fund is to be replenished. As soon as the amount of the replenished funds reaches 10 per cent of the GDP, the National Welfare Fund starts being replenished.

The money of the National Welfare Fund will be used for co-funding of citizens’ voluntary pension savings and repaying the deficit of the Pension Fund.

The Reserve Fund is actually a contingency reserve for abrupt oil price drop, etc. The major part of the Reserve Fund will be invested in foreign currency and foreign assets nominated in foreign currency. These assets include debt securities of international financial institutions and deposits in foreign banks, Rossiyskaya Gazeta reported.
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