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can assume that the ministry is targeting 15-20% yuan and 20-25% dollars. Kolychev also noted that MinFin may begin purchases of Japanese yen.
MinFin, as always, cited “geopolitical risks” as the impetus for FX diversification. In August 2019, the US sanctioned the Russian central bank, finance ministry, and NWF, forbidding US banks from participating in their primary foreign currency debt issuances. While the sanctions had little impact, they spooked Russian policymakers.
Yet the NWF’s de-dollarization will likely come at a cost. Remember, the central bank lost $7.7bn in potential returns in one year due to ditching the greenback. That said, one could argue that given the government’s decision to invest part of the NWF in domestic projects—implemented, not coincidentally, by Putin’s pals Arkady Rotenberg and Gennady Timchenko—the country’s policymakers are perhaps not too concerned about maximizing their return on investment.
47 RUSSIA Country Report December 2019 www.intellinews.com
