Russia to exit from all dollar assets in its wealth fund ( National Welfare Fund ) and they going to invest in the pound, gold, euros. yuan instead- this is what Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum on Thursday and also he said after the announcement “we don’t need to transact in dollars”
The US is expanding sanctions. the dollar is becoming riskier,” Deputy Finance Minister Vladimir Kolychev told Bloomberg.
Russia makes this shift policy change within a month, but the central bank to determine the distribution of its overall reserve holdings, he told reporters. Russia has long promoted its de-dollarisation efforts as a way to mitigate the impact of the Western embargo. In recent years, the Central Bank of Russia has increased its gold reserves and sold U.S. Treasury bonds.
Russia has traded more in rubles and other currencies. The dollar index movement in the news on Thursday as analysts said it was likely to limit its impact on the market. “Today we have $ 35% of the NWF investment,” Siluvanov said. “We have decided to withdraw completely from dollar assets, instead of investing in dollars. we are increasing investment in euros and gold. The euro will hold 40% of the fund, the Chinese yuan 30% and gold 20%.
The move would affect the liquid part of the NWF, which is currently worth $ 120 billion. Despite the large sums involved, the change is unlikely to affect markets, as the NWF represents only a fraction of Russia’s $ 600 billion in international reserves. The transaction will not include the actual sale of the dollar, as it will take place through domestic transfers and an accounting shift within the central bank, Bloomberg reported.
Andrei Belosov, the first deputy prime minister and one of the country’s most influential economic policymakers, said the decision would not affect the ruble’s exchange rate. The Russian currency traded 73.2 against the US dollar in Moscow trading on Tuesday afternoon.
Russia’s central bank has been cutting its share of the U.S. dollar in recent years and is preparing to continue, according to Kremlin spokesman Dmitry Peskov. Russia’s relations with the U.S. and its allies have plummeted since 2014 and after Russia’s involvement in elections, hacking attacks, and other issues.
These incidents are happening just two weeks before The long-anticipated meeting between united states president Joe Biden and Russian president Vladimir Putin will take place next month in Geneva, Switzerland on June 16, 2021.
Over the past year, the U.S. has issued strong sanctions against Russian officials: long election list: electoral interference; Harasses Russian activists and journalists, including opposition leader Alexei Navalny, who is currently in prison; Engages in malicious cyber activities; Threatening Ukraine and other activities. Russia has been criticized for interfering in US internal affairs and threatening international stability
Geneva was the first meeting place between US President Ronald Reagan and Soviet Prime Minister Mikhail Gorbachev in 1965, which helped defuse tensions during the Cold War. Gorbachev, now 90, told the Interfax news agency on May 27 that “a lot has been lost in terms of strategic stability, now it needs to be restored.” He added that Biden was someone who could “negotiate” with Russia and that the previous administration was not credible. “