Huge currency reserves and budget surplus. This is how Russia prepared the economy for war

Russia attacked Ukraine. In response, the European Union and other Western countries announced tough sanctions on the local economy. There are voices among European leaders that Russia should be isolated from international financial markets. The Kremlin has been preparing for the sanctions scenario and market repercussions for many years, and this can be seen in its budget policy and Central Bank actions.

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In December last year, the Russian authorities adopted the Budget Code for the period 2022-2024.

“The priority of the Kremlin’s budget policy in the coming years will be to increase the state reserves, which have already broken the recordwhich are a safety for the Russian government in the event of unfavorable external developments (sanctions or collapse of raw material markets) or internal (further reduction in subsidies and social unrest). The massive collection of these funds in conjunction with the Kremlin’s policy, which isolates the country from the world economy, and especially from the West (including import substitution, limiting the use of Western currencies), has indicated for several years that Russia is preparing for black scenarios, “and commented on the plans in That time Russia’s financial issues Iona Winevska, expert at the Center for Oriental Studies.

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