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20 Mar, 2020 13:14

Oil price crash not catastrophic for Russian economy — Kremlin

Oil price crash not catastrophic for Russian economy — Kremlin

The current turmoil on the global oil market is not disastrous for Russia, Presidential Press Secretary Dmitry Peskov said on Friday, noting the country has a safety cushion.

Russia holds vast gold and foreign exchange reserves to stabilize the economy in times of economic uncertainty. The country's total gold holdings amounted to 73.2 million troy ounces (2,276.8 tons) as of February 1, and are worth around $116 billion, while the country's total reserves have recently eclipsed $580 billion, according to the latest data from the Central Bank of Russia.

"Certainly, the price situation is unpleasant... But we can't agree that this is a disaster for Russia in the medium term because our government has a solid safety cushion which for several years could provide an opportunity to fulfill all social obligations, development plans, and so on."

Peskov reminded that "there were times when the price of oil was even lower," raising doubts that anyone could "somehow accurately" predict the situation with oil for several years. He has also denied that Russia and Saudi Arabia are waging a price war on the oil market, saying the situation is "unfavorable for many countries."

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The Kremlin spokesman noted that each country has its own budget parameters, determining policy. "You know that the Russian budget is calculated at $ 42 per barrel. Of course, this [current — Ed.] price is unfavorable for us, but we have a safety cushion, which we'll use when it is necessary. Both in the short and medium term nothing bad is going to happen," Peskov said.

Oil prices bounced off their lowest levels in 20 years on Thursday, as central banks around the world continue to offer major supportive measures to global financial markets.

On Friday, global benchmark Brent rose 2.7 percent to $29.66 per barrel as of 11:42 GMT. US West Texas Intermediate (WTI) was trading almost six percent higher at $26.56 a barrel.

For more stories on economy & finance visit RT's business section