Russia’s effort to fight Covid-19 hit by low oil prices

As leaders around the globe compete with ever-bigger spending packages, the Kremlin is hoarding hundreds of billions of dollars in reserves, worried that oil prices will stay low for a long time.

Russia has more than $550 billion stashed away, including a rainy-day fund worth $165 billion, but ING Bank estimates President Vladimir Putin’s support measures so far amount to only about 2 per cent of gross domestic product.

During the 2008-2009 global financial crisis, the country spent a tenth of GDP to counter the collapse but was able to rebuild its reserves within just a few years as crude rebounded. This time around the Kremlin is hunkering down for a prolonged period of low export revenues.