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NWF volume increased in September, thanks to recovery in stock prices and growth in gold. Finance Ministry continues to invest in yuan bonds
The Russian Ministry of Finance announced the results of the allocation of funds from the National Welfare Fund for September 2024. As of October 1, 2024, the size of the National Welfare Fund reached 12.78 trillion rubles, or 6.7% of GDP. (August - 12.16 trillion rubles). The size of the fund's liquid assets (funds in bank accounts of Russian banks) amounted to 5.25 trillion rubles, or 2.7% of GDP (in July - 4.85 trillion rubles). This month, the Ministry of Finance ordered a reduction in investment activity by about ₽3.4 billion (August - ₽726 billion), of which about ₽25.5 billion (2 billion yuan) was spent on Russian corporate bonds standardized in yuan (the third month of purchases). Yuan bonds are created constantly.) Given the recovery of the stock market, part of the illiquidity eventually showed a positive value (+220 billion rubles per month), and the position of part of the liquidity was due to the continued growth in gold prices and the strength of the yuan significantly improved (+400 billion m/m), which led to an increase in the National Wealth Fund by ~620 billion rubles.
▪️VEB.RF deposits – RUB 690.5 billion (August – RUB 690 billion);
▪️Bonds of Russian issuers – 1.576 trillion yen (August – 1.572 trillion yen), 1.87 billion yen and 7.75 billion yen (August – 5.75 billion yen);
💳 In September 2024, FB received income from the placement of funds.
✔️Liquid part. Gold revaluation and exchange rate difference for August added 431.5 billion rubles (in August — 260.6 billion rubles). This month they spent 32 rubles on investments. As is known, yuan and gold were removed from the liquid part, but this did not prevent growth by 40 billion rubles (the main contribution was the yuan). The liquid part is important because it covers the budget deficit (this year they will have to spend 1.3 trillion rubles, according to the new budget, no expenses are expected in the next few years, but it is hard to believe).
✔️Illiquid parts. The market recovery in September helped revive the shares of Sberbank and Aeroflot (+1.79 billion rubles), while the illiquid part was also in the plus: VTB shares fell by $3.5 billion.
✔️New budget. According to the new budget, the NGD increased to 11.31 trillion rubles, and the budget deficit increased from 2.1 trillion rubles to 3.3 trillion rubles. In the new document, the use of NWF funds to finance the FB deficit has not changed, as well as OFZ loans (3.92 trillion rubles), but their placement is becoming more intensive. In October, sales of yuan/gold will increase taking into account NGD and investment mirroring (sold at 5.3 rubles per day, in September at 0.2 rubles). This means an increase in withdrawals from the liquid part.