Russia Sells Off US Debt
The Russian government, previously considered a significant holder of U.S. debt, has been steadily — and sharply — paring down the vast majority of its holdings of U.S. Treasury securities.
Russian holdings of Treasury securities declined 84 percent between March and May, falling to $14.9 billion from $96.1 billion in just two months, according to a U.S. Treasury Department report released July 18.
Financial bloggers have pounced on the news as being potentially ominous, but a few analysts suspect the transactions are more closely related to Russia’s sanctions-hit economy, and portfolio allocation.
https://www.marketpulse.com/20180730/russia-sells-off-us-debt/
Oil Price Collapse Pushing Russia’s Economy To The Edge
The price of oil is falling faster than Russia can adjust its budget.
In June 2014, the global price of oil was over $110 per barrel. But due to a glut in supplies from elevated production from North America, Russia, as well as OPEC countries, oil prices have collapsed.
For Russia’s benchmark crude, Urals URL-E, the price fell to around $27 on Friday. Yet Moscow’s budget for fiscal 2016 was predicated on oil costing twice as much – $50 per barrel – itself a painfully low price.
On Saturday, Russian Finance Minister Anton Siluanov went on television to say this exceptionally low price for Urals oil meant a further reduction in revenues for his country’s budget, leading to an expected deficit of $38.6 billion for Russia in the coming fiscal year.
“Therefore there is a difference of two times [in revenues], and I want to say that for budget income this difference equates to over 3 trillion rubles [$38.6 billion],” Siluanov said during the televised interview. Russia depends on sales of oil and gas for about half its annual budget revenues.
The collapse in oil prices has also hurt the ruble, which has lost more than half its value compared with the U.S. dollar since the summer of 2014. But Siluanov said he didn’t expect significant further devaluation of the Russian currency simply because the price of oil can’t fall much further than it already has. “Our main export commodity [oil], as we have already discussed, fell in price by four times,” Siluanov said. “One can hardly expect prices to fall four times further compared to today’s level.”
The pressure on the budget is driving Moscow to expand its austerity program that will see reductions in spending for virtually all government activity outside the military and social services. But even that effort has its limits, Siluanov said on January 13th in an interview in Moscow with Bloomberg Television.
https://oilprice.com/Latest-Energy-...apse-Pushing-Russias-Economy-To-The-Edge.html
The Russian government, previously considered a significant holder of U.S. debt, has been steadily — and sharply — paring down the vast majority of its holdings of U.S. Treasury securities.
Russian holdings of Treasury securities declined 84 percent between March and May, falling to $14.9 billion from $96.1 billion in just two months, according to a U.S. Treasury Department report released July 18.
Financial bloggers have pounced on the news as being potentially ominous, but a few analysts suspect the transactions are more closely related to Russia’s sanctions-hit economy, and portfolio allocation.
https://www.marketpulse.com/20180730/russia-sells-off-us-debt/
Oil Price Collapse Pushing Russia’s Economy To The Edge
The price of oil is falling faster than Russia can adjust its budget.
In June 2014, the global price of oil was over $110 per barrel. But due to a glut in supplies from elevated production from North America, Russia, as well as OPEC countries, oil prices have collapsed.
For Russia’s benchmark crude, Urals URL-E, the price fell to around $27 on Friday. Yet Moscow’s budget for fiscal 2016 was predicated on oil costing twice as much – $50 per barrel – itself a painfully low price.
On Saturday, Russian Finance Minister Anton Siluanov went on television to say this exceptionally low price for Urals oil meant a further reduction in revenues for his country’s budget, leading to an expected deficit of $38.6 billion for Russia in the coming fiscal year.
“Therefore there is a difference of two times [in revenues], and I want to say that for budget income this difference equates to over 3 trillion rubles [$38.6 billion],” Siluanov said during the televised interview. Russia depends on sales of oil and gas for about half its annual budget revenues.
The collapse in oil prices has also hurt the ruble, which has lost more than half its value compared with the U.S. dollar since the summer of 2014. But Siluanov said he didn’t expect significant further devaluation of the Russian currency simply because the price of oil can’t fall much further than it already has. “Our main export commodity [oil], as we have already discussed, fell in price by four times,” Siluanov said. “One can hardly expect prices to fall four times further compared to today’s level.”
The pressure on the budget is driving Moscow to expand its austerity program that will see reductions in spending for virtually all government activity outside the military and social services. But even that effort has its limits, Siluanov said on January 13th in an interview in Moscow with Bloomberg Television.
https://oilprice.com/Latest-Energy-...apse-Pushing-Russias-Economy-To-The-Edge.html
