Russia Prepares for $40 Oil

"There was skepticism about $70 oil. Now Russia is preparing for something far more difficult to imagine.

The irony is that the devaluation of the ruble creates more rubles for the budget as revenue is dependent on the oil price in dollars, but spending is in nominal ruble terms. This means the government is the biggest winner from a devaluation that simply creates more rubles to spend, albeit less valuable rubles. Although well over half of the Russian budget revenue is derived from oil taxes, it is currently running an unexpectedly large 2% federal budget surplus."