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Russian Finance Minister Anton Siluanov said in an interview with CNBC on Friday that the Kremlin has factored in $40 oil in the federal budget and can survive if the price of crude reaches that level. Russia has been struggling to lessen the importance of hydrocarbon revenues to government spending.
“In order to minimize price fluctuations on foreign markets we have prepared a budget which is based on a price of forty dollars a barrel. I think that this is a fairly considered and conservative price, which has been factored in for the next three years,” said Siluanov, wrote CNBC.
“Incidentally our balance of payments on our current account is balanced on a price of forty dollars a barrel. Therefore, the percentage of the federal budget from oil and gas revenues has gone down from 60 percent to 40 percent.”
“Our challenge is to safeguard our budget, to safeguard the implementation of our obligations with regards outside factors including a reduction in the price of oil.”
One of President Putin’s goals has been to diversify the Russian economy away from oil and gas. There has been limited success in this field. One bright spot has been cryptocurrencies; Putin has gotten personally involved in the effort.