MOSCOW (Reuters) -Russia’s parliament on Friday passed a law that makes it easier for the government to use the country’s National Wealth Fund (NWF) to buy stocks of Russian companies and government bonds as an anti-crisis measure.
Looking for ways to support markets hurt by Russia’s invasion of Ukraine and Western sanctions, authorities are planning to spend the NWF money on buying Russian securities in a move similar to what they did in 2014 when Russia annexed Crimea.
The new law allows the rainy day fund to be used to buy stocks and bonds even if its liquid portion drops below 7% of gross domestic product (GDP).
The government is currently only permitted to spend money from the fund when its liquid assets exceed 7% of GDP, but Russian authorities are scrambling to limit the damage done by unprecedented Western sanctions.
The parliament, called the Duma in Russian, said the eased requirements were part of a set of laws designed to make the Russian economy and households more resilient in the face of sanctions.
As of Feb. 1, the liquid assets of the NWF stood at $112.7 billion, or 8.8 trillion roubles, equal to 6.6% of GDP projected for this year.
Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.
(Reporting by Reuters in Moscow; editing by John Stonestreet and Jason Neely)
