Russia to Ditch US Dollar?

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

All Global Research articles can be read in 51 languages by activating the “Translate Website” drop down menu on the top banner of our home page (Desktop version). 

Visit and follow us on Instagram at @crg_globalresearch.

***

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.”

To Read Complete article click here

 

*

Note to readers: Please click the share buttons above or below. Follow us on Instagram, @crg_globalresearch. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.

Featured image is from Peter Kovalev / TASS


Articles by: The Moscow Times

Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article. The Centre of Research on Globalization grants permission to cross-post Global Research articles on community internet sites as long the source and copyright are acknowledged together with a hyperlink to the original Global Research article. For publication of Global Research articles in print or other forms including commercial internet sites, contact: [email protected]

www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.

For media inquiries: [email protected]