Russia has reportedly announced that U.S. dollar assets will be removed from its National Wealth Fund as U.S. sanctions on Moscow intensify. The fund, which currently totals about $600.9 billion, forms part of Russiaâ€™s gold and currency reserves.
Russia Steps up De-Dollarization Efforts
Russiaâ€™s finance minister, Anton Siluanov, announced at the St. Petersburg International Economic Forum on Thursday that dollar assets will be removed from the National Wealth Fund (NWF) altogether as Washington continues to impose sanctions on Moscow.
According to a translation by Reuters, he told reporters:
The finance minister further revealed that the changes will happen within the next month, after which the fund will likely hold the euro (40%), the yuan (30%), gold (20%), the Japanese yen (5%), and the British pound (5%). The dollar portion of the fund will be replaced by the euro, the yuan, and the pound.
Russiaâ€™s National Wealth Fund was initially designed to support the countryâ€™s pension system. It forms part of Russiaâ€™s gold and currency reserves. According to the publication, it totaled $600.9 billion as of May 27.
Timothy Ash, a senior emerging markets strategist at Bluebay Asset Manager, calls Russiaâ€™s decision to ditch the dollar â€œvery political.â€ He believes that the move is meant to â€œsend a signalâ€ to the Biden administration with the message:
He noted that this could also be interpreted as a sign that Moscow is expecting more sanctions from the U.S.
Russian President Vladimir Putin has made de-dollarization his countryâ€™s key policy in an effort to reduce the Russian economyâ€™s exposure to dollar assets. The multi-year drive to reduce Russiaâ€™s vulnerability to U.S. sanctions comes amid deteriorating relations with Washington.
In January, Russiaâ€™s central bank published a report showing that gold had surpassed the U.S. dollars in the countryâ€™s reserves for the first time. Furthermore, Bitcoin News reported in August last year that Russia and China had been collaborating to reduce their dependence on the U.S. dollar, and trade settlements in USD between the two countries had fallen below 50%.
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