(Reuters) - Russia left its oil wealth Reserve Fund untouched in May, data showed on Tuesday, suggesting that the budget deficit was financed instead by cash from the sovereign's first Eurobond issue in over a decade.
The Reserve Fund stood at 1.20 trillion roubles on June 1, broadly unchanged from a month earlier, the Finance Ministry said in a statement. The dollar value eased to $39 billion from $41 billion, based on the average exchange rate for the month. Unlike the previous month, Russia did not transfer any money from the Reserve Fund to finance its budget, its coffers filled by a $5.5 billion Eurobond issue in late April [ID:nLDE63L0HZ]. The budget's needs for cash also tend to be lower early in the year, with spending tilted towards the final months despite urgings from the Finance Ministry for a more even distribution.
The Reserve Fund -- accumulated during nearly a decade's worth of oil-fuelled economic boom -- is now propping up the budget, which slipped into the red in 2009 as Russia's gross domestic product suffered its biggest contraction in 15 years.
Deficits are expected to last until 2015, with this year's gap seen at up to 6.8 percent of GDP, some 3 trillion roubles.
The Reserve Fund was originally expected to run out this year, but higher oil prices as well as government borrowing are now likely to prolong its life into 2011.
The second outlet for Russia's oil revenues, the National Welfare Fund, was also broadly stable at 2.62 trillion roubles, or $86 billion.
The NWF was initially designed to fund longer-term projects but, in the wake of the crisis, some of the cash will be used to plug a deficit in the state pension fund. Some 2.50 billion roubles was transferred there from the NWF in April. (Reporting by Yelena Fabrichnaya; writing by Toni Vorobyova; editing by Stephen Nisbet)
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