Page 62 - RusRPTFeb19

Switzerland and Saudi Arabia.
Russia’s central bank reduced the US dollar’s share in foreign exchange reserves by 24.4 percentage points on the year to 21.9% as of the end of June 2018 and raised the share of the euro by 6.9 percentage points to 32%, the regulator said in a report Wednesday. In monetary terms the CBR reduced its share of dollars by about $100bn and largely replaced that with yuan.
At first glance, the 15% share of RMB in Russia’s GIR may seem like a catch up with the growing role of China in the Russian external trade turnover, which reached $100bn in 0218. China now accounts for 15% of Russia’s trade in 2017-18. However, it is also known that even the China-RUS trade is by 70- 90% USD-denominated due to the product mix, and the role of RMB in Russia's trade turnover is equivalent to around $10bn per year, which corresponds to only 2% of Russia's external trade. By that metric, the $67bn worth of RMB in the CBR reserves appear massive and may reflect Russia's political preference for a higher role of China as Russia's trade and investment partner in the future.
The regulator also raised investments in gold to 16.7% from 16.1%. The share of the Chinese yuan in foreign exchange reserves grew to 14.7% from 0.1% as of the end of June 2017.
The central bank moved the equivalent of $44bn each into the European and Chinese currencies in the second quarter, according to a report published on January 9 by the Bank of Russia, which discloses the data with a six-month lag. Another $21bn was invested in the Japanese yen.
Russia’s yuan share is now about ten times the average for global central banks, with its total holdings of the currency accounting for about a quarter of world reserves in yuan, according to International Monetary Fund data.
The central bank data show Russia also cut the share of its reserves held in the US to just 10% of the total from 29% at the end of March, suggesting some of the remaining dollar assets are now held in other countries. This aligns with data compiled by the US Treasury, which shows an increase in American bond holdings in Belgium and the Cayman Islands last year.
62 RUSSIA Country Report February 2019 www.intellinews.com