Russian Gov't Protected Public From Oil Price Fall by Devaluing Ruble

Moody's Investors Services said that the impact of the decline in global oil prices on regions in Russia has been cushioned by an accompanying decline in the value of the ruble versus the US dollar.

WASHINGTON (Sputnik) — The impact of the decline in global oil prices on regions in Russia has been cushioned by an accompanying decline in the value of the ruble versus the US dollar, the New York-based Moody's Investors Services announced.

"Russian regions have been protected from the full impact of weaker oil prices by a devaluation of the ruble," Moody’s said in a report on Tuesday.

The Russian government’s devaluation of the ruble had boosted ruble-denominated earnings from oil exports, which are priced in US dollars, the report noted.

Consequently, "The weaker ruble will limit the overall decline in Russian regions' corporate tax revenues in 2016 to between 6 percent and 10 percent," Moody’s explained.

Analysts have said the conservative fiscal policies of the Russian government have given it the gold and foreign currency reserves it needs to practice financial flexibility through the recent drop in oil prices.

However, global oil prices have recovered by 50 percent in the past two months, according to media reports on Tuesday.