Stabilization Fund (Stabilization Fund)
What is a stabilization fund?
State Stabilization Fund (Stabilization Fund) - a monetary fund formed most often from the state's excess revenues, the main task of which is to maintain the stability of the country's economic state in times of crisis.
In non-crisis periods, resources from the stabilization fund are used at the discretion of the state financial authorities, including invested.
Every country has such a stabilization fund to some extent.
Is there a Russian stabilization fund?
Stabilization Fund of the Russian Federation - is a part of the federal budget funds generated by the excess of the oil price over the base oil price, subject to separate accounting, management and use for the purpose of balancing the federal budget when the oil price falls below the base oil price.
The Stabilization Fund of Russia is credited with the federal budget balances at the beginning of the fiscal year, as well as free federal budget balances required by the Ministry of Finance of the Russian Federation.
Since February 1, 2008, the Stabilization Fund of the Russian Federation has been divided into two parts: the Reserve Fund and the National Welfare Fund.
In what are the funds in the RF Stabilization Fund stored?
The resources of the Stabilization Fund are set aside in foreign currency: dollars, euros, British pounds sterling.
Funds are held in the accounts of Bank of RussiaThe Central Bank shall pay interest for the use of funds. Replenishment of funds shall be carried out through purchase of debt obligations of foreign countries.
These include debt securities of the governments of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom and the United States.
Why does Russia need a Stabilization Fund?
The Stabilization Fund of the Russian Federation performs the following functions:
- is a built-in stabilizer (along with such well-known and commonly used ones as the progressive tax and unemployment benefits);
- provides additional sustainability to public finances;
- may serve as a source of funding for investment programs that reduce budget expenditures of future periods.