forex Russia Continues to Move Out of the Dollars.

[Anzo Lim 0]

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Russia is planning to cut the proportion of US dollars in its US$ 125 billion of sovereign wealth fund. Last year, the central bank have made large withdrawal from dollar assets. According to Russia’s Deputy Minister of Finance Kolychev, “Geopolitical risks are one of the major factors for changing Russia’s foreign reserve structure. It’s safe to say that the share of US dollar will decline, and Russia will consider to enlarge its foreign reserve in other currencies, such as Renminbi or the Euro.” 

 

Russian president Vladimir Putin urged Russia to cut reliance on US dollar, as the US had stepped up its sanctions over Russia in the past few years. The Central Bank of the Russian Federation sold off 100 billion of dollar assets and purchased Euro and Renminbi, and the measure to diversify the country’s foreign reserve also made Russia the world’s largest holder of Renminbi reserve.

 

Thanks to the steady inflow of oil revenue, Russian’s sovereign wealth fund have increased to US$124.5 billion, currently consisting of 40% US dollar, 30% Euro and 6% British pound. Dmitri Dorkin is the Chief Economist of the International Netherlands Group. He said: “Because the central bank has considerable amount of foreign reserve, it can satisfy the demand of the Ministry of Finance to change the currency structure without market operations.”

Edited November 15, 2019 by Anzo Lim