Russia Is Rapidly De-Dollarizing Its $500bn Foreign Reserves


Gold reserves share in the international reserves of the CBR by the end of 2018 reached 67.9mn ounces (about 2,112 tonnes) and now account for 18.6% of the CBR’s total gross international reserves (GIR). 

Previously in 2018, the CBR caused a stir in the international bond markets by apparently dumping 84% of its holdings in US treasury bills, or about $100bn worth of bonds, bringing its holding in the world’s favourite gross international reserves (GIR) instrument down to a mere $14.9bn.

Also in October a package of measures aimed at lowering Russia’s dependence on the US dollar was prepared by the CBR, the finance ministry, and the Ministry of Economic Development.

At the same time the CBR has dramatically increased the amount of Chinese yuan it holds as a reserve currently, which was up to 15% of the total as of the end of 2018 from 5% at the end of the first quarter of last year, reports Bloomberg. That is way beyond China’s share of Russia’s trade, which topped a record $100bn in 2018, but only 14% of these deals are settled in yuan and 7-8% are settled in rubles, according to the Ministry of Finance.

The CBR bought $44bn worth of the Chinese currency in the second quarter of 2018 and Russia held $67bn in yuan as of mid-2018, the last data available as the CBR releases GIR details with a six-month lag.

China’s yuan has become the fourth largest component of Russia’s international reserves after the euro (32%), the US dollar (22%), and gold (17%).

Stockpiling gold has been a good bet. The backdrop of the general geopolitical brouhaha drove up the value of gold by 13.4% in 2018 so the CBR pile is now valued at $86.9bn from total reserves of $468.5bn as of December 2018.

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