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Slumping oil prices have put Russia’s economy on course for a sharp recession next year, Finance Minister Anton Siluanov said Friday, as authorities scaled up their bailout for the first bank to succumb to the recent ruble crisis.

The economy is slowing sharply as Western sanctions over the Ukraine crisis deter foreign investment and spur capital flight, and as a slump in oil prices severely reduces Russia’s export revenues and pummels the ruble.

The government has taken steps to support key banks and address the deepening currency crisis over the past week, including a sharp and unexpected interest rate hike, but analysts are pessimistic on the outlook for both the economy and the ruble.

Siluanov told journalists on Friday the economy could shrink by 4 percent in 2015, its first contraction since 2009, if oil prices average their current level of $60 a barrel.

He also said the country will run a budget deficit of over 3 percent next year if the oil price does not rise.

“Next year we will, without doubt, have to bring the reserve fund into play,” he said, referring to one of Russia’s two rainy-day funds intended to support the economy at times of crisis.

Crude prices have almost halved from their June peak amid a global glut and a decision by producer group OPEC not to cut output. Saudi Arabia said Friday it is prepared to withstand a prolonged period of low prices.

“We need to have our budget break even at $70 per barrel by 2017,” said Siluanov.

Russia’s government imposed informal capital controls this past week, including orders to large oil and gas exporters Gazprom and Rosneft to sell some of their dollar revenues in a bid to shore up the ruble.

Russians have kept a wary eye on the exchange rate since the collapse of the Soviet Union, when hyper-inflation wiped out their savings over several years in the early 1990s.

The ruble’s fall will inevitably lead to higher inflation next year, which after years of stability threatens President Vladimir Putin’s reputation for ensuring Russia’s prosperity.

On Friday the Russian currency slipped after hitting its strongest levels in more than three weeks earlier in the day. The ruble was trading at over 54 per dollar, a sharp rebound from its recent all-time lows of 80 but still far weaker than the 30-35 range it was trading at in the first half of 2014.

“If oil goes down to $50 (per barrel) . . . I don’t think our authorities will be able to artificially maintain the (ruble) rate even with higher sales by exporters,” said the head of treasury at a major Russian bank.

On Friday, Russian authorities also significantly scaled up rescue funds for Trust Bank, saying they will provide up to $2.4 billion in loans to bail out the midsize lender.

The falling ruble has prompted panic buying of foreign currency in Russia and a spike in deposit withdrawals, heaping pressure on a vulnerable banking sector whose access to international capital markets has already been restricted by Western sanctions.

Siluanov said Friday that authorities will provide additional capital to the country’s second-largest bank, VTB, and fellow state lender Gazprombank.

VTB could receive 250 billion rubles and Gazprombank 70 billion rubles to help fund investment projects, including those planned by Russian Railways, he said.

It was not clear whether this support will be in addition to the 1 trillion ruble capital boost the banking sector is set to receive as part of legislation recently approved by parliament.

Credit agency Standard & Poor’s said earlier in the week it could downgrade Russia’s rating to junk as soon as January due to a rapid deterioration in “monetary flexibility” in the country.

Meanwhile, Russian gold and forex reserves have fallen to their lowest levels since 2009. Reserves have dropped by as much as $15.7 billion to below $400 billion, down from over $510 billion at the start of the year.