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. Last Updated: 07/27/2016

Oil Fund Surges to $88.4Bln

The oil stabilization fund surged to 2.35 trillion rubles ($88.43 billion) as of the end of last year as the world's second-biggest oil exporter benefited from high prices of the commodity.

The stabilization fund added 157.4 billion rubles, or 7.2 percent, in December, the Finance Ministry said in a statement Wednesday.

High oil prices have helped boost Russia's gold and foreign currency reserves to a record $299.2 billion as of Dec. 22, the world's third largest. They also helped Russia record its eighth consecutive year of economic growth.

Russia, the world's biggest oil exporter after Saudi Arabia, diverts some of the revenue from oil that is priced above $27 per barrel into the fund, created in January 2004 to help curb inflation and cushion the economy should crude prices fall.

Last month, the Economic Development and Trade Ministry increased its forecast for 2006 economic growth to 6.8 percent, faster than its initial 6.6 percent estimate. In July, the government began switching the fund from rubles to foreign currencies as a first step toward boosting the return on its investment. The deposits are held 45 percent in euros, 45 percent in dollars and 10 percent in British pounds.

The government completed the placement in October.

The Russian government must devise a strategy to adjust to consistently higher oil prices, the Organization for Economic Cooperation and Development said in a report published Nov. 27. Oil reached a record $78.40 per barrel July 14. Crude oil for January delivery was at $62.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange.