Russia to drop USD from reserve fund

RUSSIA / FSU POLITICS - In Brief 04 Jun 2021 by Alex Teddy
On June 3 the Finance Ministry said that it will no longer keep holdings in USD. It will switch to more RMB, EUR and gold. The national welfare fund has USD 41 billion in USD at the moment. The switch away from USD is to be completed in a month.The liquid part of the NWF is USD 120 billion. It will be affected. The shift will probably not impact markets much. In total Russia's international reserves are USD 600 billion. The changeover does not require USD to be sold. There will be internal transfers and accounting shifts.Andrei Belousov said that the move will not change the RUB's exchange rate. Russia has been slowly reducing the share of USD it keeps in reserve for years. The motive appears to be more political than economic. It is unlikely that the US would engage in sanctions against the Russian Central Bank.

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