Russian Wealth Fund Took Its First Step Against The US Dollar
Russian wealth fund took its first step against the US dollar. Russia previously announced that it would zero-out its USD holdings.
Russia made its first sale of $5 billion, within the framework of its goal of reducing USD assets in the wealth fund against possible sanctions from the United States.
In the statement made by the Ministry of Finance of Russia, it was stated that 4 billion of the 5 billion dollars were converted to Yuan and 1 billion to the Euro. Accordingly, the country’s assets of approximately 35 billion dollars remained.
The Russian Ministry of Finance announced in a previous statement that they wanted to reduce the dollar assets in the country to zero.
The transaction is expected to have a limited impact on the market as it takes place within the large reserves of the Central Bank of Russia.
Citigroup Economist Ivan Tchakarov, on the other hand, states that this step may have been made for a public relations campaign before the Biden-Putin summit.
There are $41.5 Billion in the Fund
The Central Bank of Russia has been gradually reducing the amount of dollars in its composition for the last few years against the sanctions that may come from the USA and Europe.
Finance Minister Anton Siluanov noted that after the change, 40 percent of the fund’s assets will be held in Euro, 30 percent in Yuan, 20 percent in gold, 5 percent in Yen and 5 percent in British pounds.
It holds 35 percent of its liquid assets in US dollars, which equates to $41.5 billion. Along with illiquid assets, the size of the wealth fund corresponds to approximately 185.9 billion dollars.