Page 69 - RusRPTApr21

5.2.4 Gross international reserves
Russia’s international reserves fell by $2.4bn in February to $586.3bn but still are way above the CBR’s $500bn “comfort level. Part of the fall was due to the drop in the price of gold that make up about a third of the CBR’s reserves ($130.3bn as of the end of February).
Russia’s Finance Ministry has given the National Wealth Fund (NWF) the go ahead to hold part of its assets in gold, as part of Russia’s efforts to reduce its dependence on gold as a reserve currency, Russia Business today reports on March 28.
The Central Bank of Russia (CBR) has had a policy to increasing the share of gold in its reserve mix since 2007 and reducing the dollar. Russia’s international reserves fell by $2.4bn in February to $586.3bn Part of the fall was due to the drop in the price of gold that make up about a third of the CBR’s reserves ($130.3bn as of the end of February).
Until now the NWF held its reserves in various denominations, but now will be allowed to accumulate gold as well.
Finance Minister Anton Siluanov had previously supported the idea of allocating the NWF assets more efficiently, highlighting that precious metals are much more sustainable for investments than financial market assets in the long-term.
In February, the Ministry of Finance reduced the portion of dollars and euros in the currency structure of the NWF from 45% to 35%, replacing it with Japanese yen and the Chinese yuan by 15% with another 10% held in British pounds sterling.
The NWF is a rainy day fund that can be be used to cover budget deficits in times of crisis. As of November 1, the assets of the fund amounted to more than $167 billion, which is about 12% of the country’s GDP, of which just over 7% is liquid. The rules governing the fund allow the government to invest any money above the 7% of GDP threshold.
69 RUSSIA Country Report April 2021 www.intellinews.com