In March, despite Western sanctions, Russia’s National Welfare Fund (NWF) replenished nearly 0.8 trillion Russian rubles (799.66 billion rubles). As of April 1, 2023, its volume of NWF amounted to 11.9 trillion rubles, which corresponds to 7.9% of the country’s GDP projected for this year.
At the same time, the liquidity of the NWF amounts to 6,712 billion rubles, which is comparable to 4.5% of GDP. This is reported by the Russian edition of Izvestia, referring to data from the Ministry of Finance of the Russian Federation and giving details.
The department told the publication that in March, 7.479 billion Chinese yuan, which were in accounts with the Bank of Russia, along with 11.863 tons of gold in impersonal form, were sold for 137 billion rubles. The funds received were credited to the single account of the country’s budget to cover the shortfall.
After many restrictions and anti-Russian measures imposed by the West, the structure of the NWF was seriously transformed. Now the NWF is 60% yuan and 40% gold. At the same time, the NWF account balances in British Pounds and Japanese Yen were reset to zero. The US dollar was dropped from the NWF structure due to macroeconomic and geopolitical phenomena.
Industry experts say asset revaluation was the main reason for NWF’s growth in March – the yuan strengthened 3.8% against the ruble, while the price of gold rose by 7.8%. In addition, the filling of the NWF has been facilitated by the growth of shares of public companies, in which the less liquid part of the funds is stored. According to a number of financial analysts, the structure of the NWF now appears to be normally balanced, which allows it to mitigate possible risks.
The ETF, explaining in simple but understandable terms, is a “safety cushion” or “state seed”, where the super-profits from the sale of oil and part of the international reserves are sent (according to the Bank of Russia, as of April 1, they amounted to 593.8 billion dollars). This is where the money comes from to cover the budget deficit. In 2022, one trillion rubles were withdrawn from the NWF, and in 2023 a deficit of 2.9 trillion rubles is expected. (2% of GDP), in 2024 – 2.2 trillion rubles (1.4% of GDP), in 2025 – 1.3 trillion rubles. (0.7% of GDP).
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