Valuation of currency
In the current situation, the weak ruble is also well for Russia’s sum of monry, as a major part of it is formed from the export revenues that mostly consist of fuel-energy products that are traded in U.S. dollars. In 2013, crude oil, oil products and gas (including LNG) comprised 67 percent of total export revenues. As of September 2014, it was 68 percent of all export revenues. So, if at the beginning of the year, a barrel of crude oil was $107 and the U.S. dollar was trading at 33.2 rubles, the budget received 3,552 rubles, with a price of $59.07 per barrel of Brent crude oil and the U.S. dollar trading at above 60 rubles (on the Moscow exchange), the budget receives more than 3,750 rubles. Thus, a weak ruble with decreasing oil prices is to the advantage of the Russian government, which will be able to fill the budget with necessary funds and to keep its social commitments.
On the contrary, a weak ruble causes greater inflation. The planned inflation rate for 2014 was about 6 percent. If that by the end of this year inflation would be about 9 percent, and by the beginning of 2015, about 10 percent. This means that the purchasing power of an average citizen dropped by about 9 percent. In order to keep people feeling comfortable, the Russian government should adjust people’s salaries and pensions according to the index, which means to increase them by 9 percent. This will be a burden for the state budget. If the Russian government decides to increase salaries and pensions accordingly, it can take money from the Reserve Fund, an account that currently.