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UPDATE 1-Russia sees stronger rouble wiping out oil gains

Published 04/01/2010, 10:12 AM
Updated 04/01/2010, 10:20 AM

* Sees rouble at 28-29 per dlr vs 33.9 planned in budget

* Sees 2010 budget deficit at 6-6.8 pct

(Adds details, quotes)

By Toni Vorobyova

MOSCOW, April 1 (Reuters) - The Russian rouble will firm this year, eating away any extra revenues generated by higher oil prices and leaving the budget with a deficit of at least 6 percent, Finance Minister Alexei Kudrin said on Thursday.

"We had factored in (the average rate) of 33.9 roubles (per dollar), but now it looks like the rate is going to be some 28-29 roubles," Kudrin told reporters. "That means that for every dollar that we earn, we will lose 2 or 3 roubles when we convert them into roubles."

Russia's budget gets around 60 percent of its revenues from oil and gas, which are priced in dollars. This dependence helped push the budget into the red for the first time in a decade last year, as crude prices fell and global demand weakened.

The rouble closed at 29.36 per dollar on Thursday, having averaged 29.82 so far this year, according to Reuters calculations . The currency has been supported by strong oil prices in recent weeks, although its appreciation has been mostly against the broadly weakening euro.

The price of Russia's Urals export oil blend, meanwhile, averaged $75 a barrel in the first quarter, compared to the $58 figure factored into the budget .

"The increase in oil prices boosts revenues, but the appreciation of the rouble reduces them," Kudrin said, forecasting that the 2010 budget deficit would come in at between 6.8 percent -- the planned level -- and 6.0 percent.

Russia plans to gradually reduce the deficit over coming years as it recovers from recession. The economy contracted 3.8 percent year-on-year in the final quarter of 2009, broadly in line with expectations, data showed on Thursday. [ID:nMOS007543]

The full year 2009 contraction was confirmed at 7.9 percent -- the worst showing in 15 years. The first quarter of 2010 though is expected to show a return to growth, with expansion of 3.7 percent, helped in part by low base effects. [ID:nLDE61N0Y0]

(Editing by Toby Chopra)

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