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Sunday, 25 September 2016

Russia decries ‘castles in the sky’ as plans converge on $40 oil | GulfNews.com

Russia decries ‘castles in the sky’ as plans converge on $40 oil | GulfNews.com:

"Oil has traded above $40 for five months, but Russia’s future economic plans increasingly revolve around crude prices at that level.
The price of Russia’s main export blend Urals at $40 a barrel will be used to calculate the country’s budget in 2017-2019, and a fiscal mechanism that will go into effect from 2020 should be set at the same level — or $10 less than previously suggested, Finance Minister Anton Siluanov said at a conference in Moscow on Friday. The so-called budget rule, which would prevent the government from spending surplus revenue above a preset oil price, aims to insulate the economy from the ups and downs in crude and shield the exchange rate by withdrawing all additional income into reserves.
“Plans can’t be made under the assumption that prices will grow and demand for our products will rise,” Siluanov said. The Finance Ministry “always advocates a position against building exuberant plans, castles in the sky.”"



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