Move is the latest part of Moscow’s de-dollarization drive amid sanctions pressure, but analysts see accounting trick.

By The Moscow Times

Global Research, June 03, 2021The Moscow Times

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Russia’s sovereign wealth fund will ditch its holdings in dollars from its $185 Billion Reserve Fund, dramatically increase its holdings of Chinese yuan and invest in gold for the first ever time, Russia’s Finance Ministry said Thursday.

Finance Minister Anton Siluanov told the St. Petersburg International Economic Forum (SPIEF) that Russia’s $186-billion national welfare fund (NWF) would completely divest its $41 billion worth of holdings in dollars within a month.

“Today we have about 35% of NWF investments in dollars,” Siluanov said. “We’ve decided to get out of dollar assets completely, replacing investments in dollars with an increase in euros and gold.”

The share of euros in the fund will be increased to 40%, the Chinese yuan will account for 30% and another 20% will be stored in gold.

The move will affect the liquid part of the NWF, which currently stands at around $120 billion. Despite the vast sums involved, the shift is unlikely to affect markets, since the NWF represents just a slice of Russia’s overall $600 billion worth of international reserves. The transaction will not involve the actual sale of dollars, as it will be carried out through internal transfers and an accounting shift within the Central Bank, Bloomberg reported.

First Deputy Prime Minister Andrey Belousov, one of the country’s most influential economic policymakers, said Thursday the decision would not affect the ruble’s exchange rate. The Russian currency was flat against the U.S. dollar at 73.2 on Tuesday afternoon in Moscow trading.

Russia’s Central Bank has also been reducing the share of U.S. dollars within its overall reserves over recent years, a policy which is set to continue, Kremlin spokesperson Dmitry Peskov said, as Russia seeks to reduce its dependence on the greenback under the specter of possible new sanctions.

Renaissance Capital’s Sofya Donets said the move was largely technical, and dubbed the decision “a political declaration, rather than a necessary step.”

“Although sanction risks are present, I assume that risks for the Central Bank’s reserves kept in U.S. dollars are basically non-existent,” she told The Moscow Times.

The U.S. levelling sanctions against Russia’s Central Bank would “be in conflict with the current international monetary settings — like a third world war.”

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Featured image is from Peter Kovalev / TASS

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13 June 2015The original source of this article is The Moscow TimesCopyright © The Moscow TimesThe Moscow Times, 2021

About Jaime C.

Uncovering the mainstream media lies

One response »

  1. technofiend1 says:

    Reblogged this on © blogfactory and commented:
    Russia ditching dollar


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