Russia Scales FX Buying to Cool the Ruble and Refill Its Wealth Fund as Oil Hits $95

 Russia's Finance Ministry will sharply increase its purchases of foreign currency and gold over the coming month, deploying a surge in oil revenues to rebuild the National Wealth Fund and ease upward pressure on the ruble, which has strengthened to levels that erode export earnings and budget receipts.

The ministry said on June 3 that it would spend 208.2 billion rubles ($2.81 billion) on foreign exchange and gold between June 5 and July 6, with daily purchases of 9.9 billion rubles ($133.7 million). The Central Bank will execute the operations on behalf of the government under the country's fiscal rule, which channels additional oil-and-gas revenues into the sovereign wealth fund when crude prices exceed a preset threshold.

After accounting for previously scheduled compensating operations linked to earlier drawdowns from the National Wealth Fund, the net volume of purchases will amount to 5.3 billion rubles ($71.6 million) per day. That is 4.4 times the daily pace of 1.2 billion rubles recorded in May.

The increase is driven by oil prices. The average price of Russia's crude exports reached $95 per barrel in April — the highest since 2014 — which determines May tax receipts and June currency operations. Under the current fiscal rule, revenues generated when oil prices exceed $59 per barrel are diverted into foreign currency purchases and the National Wealth Fund. The sharp rise in the oil price has therefore triggered a correspondingly sharp increase in the volume of FX the ministry is required to buy.

Market Impact

Analysts at Gazprombank estimate that the Central Bank's net purchases will account for roughly 4% of market turnover in June, up from approximately 1% in May, creating a measurable downward bias on the ruble. The currency weakened modestly following the announcement, with the dollar rising 0.9% against the ruble on the over-the-counter market to 73.95 rubles, the euro gaining 0.8% to 85.6 rubles, and the Chinese yuan climbing 1% on the Moscow Exchange to 10.9 rubles.

The purchase volumes are expected to rise further. Gazprombank forecasts daily government purchases of around 9 billion rubles in July. State-owned lender VTB projects daily interventions could reach as much as 15 billion rubles ($202.5 million) per day.

Additional budget revenues from the oil-price surge were lower than some analysts had anticipated. Raiffeisenbank had forecast currency purchases of around 330 billion rubles, but the actual figure came in at 208.2 billion. The bank attributed the shortfall to lower oil production and reduced refinery output.

Ruble Trajectory

Economist Dmitry Polevoy said the ruble is likely to remain relatively firm over the summer, trading around 70 per dollar, before easing toward 75–80 per dollar later in the year. He cited several factors supporting the currency: elevated oil and gas revenues, exporters selling excess foreign currency earnings amid sanctions risks and high ruble interest rates, and subdued import demand and capital outflows as economic growth slows.

Vladimir Gusakov, CEO of ratings agency ACRA, said a depreciation of around 10% by year-end — to roughly 80 per dollar — was a reasonable assumption.

Polevoy added that a more substantial weakening was likely in 2027, when the government may revise its fiscal rule. The current benchmark oil price of $59 per barrel could be lowered to $50 per barrel, he said, which would alter the volume of revenues diverted into FX purchases and the wealth fund.

The fiscal rule, in its current form, acts as an automatic stabiliser: when oil prices rise, the government buys foreign currency, accumulating reserves and limiting real appreciation. When prices fall, it can sell FX to finance spending. The June increase in purchases marks the most significant activation of that mechanism since the current framework took effect. For the ruble, for Russian sovereign reserves, and for the energy-linked trade flows that connect Russia to global commodity markets, the trajectory of these purchases in the coming months will serve as a direct measure of the fiscal and monetary response to a windfall that has arrived faster than expected.