Stabilization reserve shrinks by €3.6 million on year
The market value of the volume of Estonia's stabilization reserve shrank by €3.6 million in the last year to land on €428 million in March, a finance ministry report suggests.
The market value in volume of the stabilization reserve for use in crisis situations was €427,686,221 in late March, down €3.58 million over the last 12 months.
The first three months of 2022 saw the reserve shrink by €2.45 million.
The reserve has seen neither payments nor withdrawals in the first quarter. The profitability of reserve assets fell by 2.26 percent during the period.
Bonds made up 86.5 percent of investments and balance 13.5 percent. Major investors were the Bank of Estonia (13.5 percent), Bpifrance Financement SA (12.9 percent) and Austria (12.6 percent).
The stabilization reserve, first created in 1997, can be used in crisis situations following approval from the Riigikogu. Its initial volume was 701.6 million Estonian kroons or €44.8 million. The reserve has been used to cover the debts of the bankrupt Estonian Maapank and to manage risks created during the 2009 economic crisis.
In April of 2020, the Riigikogu greenlit the gradual and needs-based use of the reserve for mitigating the economic damage caused by the coronavirus crisis.
The State Budget Act provides that the stabilization reserve is made up of a part of Bank of Estonia profits, the public cash flow surplus of the previous economic year following a Riigikogu decision, income from reserve management, state budget appropriations and other legal sources.
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Editor: Marcus Turovski