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. Last Updated: 07/27/2016

Russia Opposes IMF Move To Regulate Windfall Funds

NEW YORK -- The Finance Ministry opposes a recommendation by the International Monetary Fund to create rules governing how oil-exporting countries use windfall oil revenue.

Deputy Finance Minister Sergei Storchak said Russia and other oil-pumping nations had to be free to spend oil revenue depending on the specific needs of the country.

"Currently, there is no unified approach on how to use such resources," Storchak said in an interview Sunday in Washington, during a World Bank and IMF meeting. "So far, there is no need for the unified rules, particularly because needs of the producers are so different."

The IMF is switching its focus away from development lending to overseeing the financial policies of countries in a bid to bolster global economic growth. At the same time, Russia plans to split its stabilization fund, which holds windfall oil revenue, into two accounts, the reserve fund and the future generations fund, to invest in either securities or infrastructure projects.

Storchak said Saudi Arabia used some of its own windfall oil revenue to produce drinking water, a need that other oil exporters do not share.

Russian authorities are allowed to invest stabilization fund money into foreign currencies, including dollars, euros and pounds, and some government debt, such as that issued by Britain and the United States. The fund exceeded $108 billion at the end of March.

The government will decide by the fall how to use the Future Generations Fund and may seek outside managers to administer it, Storchak said.

"We at the ministry believe that it should be invested into securities, while our opponents insist that it's better to leave developed infrastructure, rather than money, to the future generations," Storchak said.