Russia considers reviving suspended policy
Russia’s finance ministry is considering an early resumption of foreign currency operations under the country’s budget rule as the rouble strengthens sharply, finance minister Anton Siluanov said on Thursday.
The move would partially unwind an earlier decision to suspend such interventions until 1 July 2026 and would restore a key mechanism that channels excess oil and gas revenues into purchases of foreign currencies and gold. No timeline has been set, but Siluanov’s comments indicate the option is now under active review.
Aim is budget stability, not currency profits
Siluanov stressed that the objective is not to profit from exchange rate swings. The budget rule is structured to shield state finances from commodity price volatility by defining when and how the government intervenes in the currency market once energy income exceeds preset thresholds.
Under the current framework, the trigger level is linked to a Urals crude oil price benchmark of 59 dollars per barrel. When hydrocarbon revenues rise above this level, the state traditionally uses the surplus to buy foreign currency and gold, building buffers and smoothing budget inflows.
Rouble rise prompts rethink of suspension
The rouble has strengthened in recent weeks, trading around 75.2 per U.S. dollar, supported by a sharp increase in foreign-denominated energy revenues. This appreciation has led officials to reassess the earlier decision to suspend foreign exchange operations until mid‑2026, a pause that was tied to planned changes in the budget’s baseline oil price.
A renewed use of the mechanism would see the government sell roubles to purchase foreign currency, putting downward pressure on the exchange rate. By limiting the rouble’s rise, authorities would increase the rouble value of dollar‑based energy receipts, supporting budget stability.
Budget under strain despite revenue surge
The reconsideration comes against a backdrop of mounting fiscal pressure. Russia’s federal budget deficit reached 4.58 trillion roubles in the first quarter of 2026, already exceeding the planned shortfall for the full year.
This strain has emerged even as fossil fuel export revenues surged. In March, such revenues jumped 52% from February to a two‑year high, driven by Urals crude prices climbing to 77 dollars per barrel. Projections indicate that mineral extraction tax receipts from oil could reach about 700 billion roubles in April, more than double March’s level.
Market impact of renewed interventions
Analysts note that a restart of budget‑rule currency purchases would likely cool the rouble’s recent rally. By re‑entering the foreign exchange market as a steady buyer of foreign currency, the state would moderate the pace of appreciation, affecting the conversion value of rouble‑denominated holdings into international currencies.
Traders who have benefited from the rouble’s rapid gains may see those moves slow if interventions resume. For authorities, the priority remains smoothing fiscal inflows and insulating the budget from swings in oil prices and exchange rates, rather than pursuing speculative gains.
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