Russia is now holding more gold than U.S. dollars in its reserves for the first time, as claimed by the latest Russia’s central bank report.
Russian President Vladimir Putin has made de-dollarization his country’s key policy to decrease the Russian economy’s dependence on the U.S. dollar amid substantial sanctions.
As cited in a report published this week by the Bank of Russia, Gold has reportedly exceeded U.S. dollars in Russia’s reserves of $583 billion for the first time in history. The country has been growing its international reserves in recent years.
The report reveals that gold made up 23% of the central bank’s reserves as of June 30, 2020, Bloomberg reported, citing the latest data with a breakdown. The share of the U.S. dollar in the reserves has fallen to 22% from more than 40% in 2018. The euro made up about a third of the total assets, followed by gold which is now the second-largest component. About 12% is in the Chinese yuan.
The rise in the gold component of the reserves is boosted by the 26% surge in the price of the metal between June 2019 and June 2020, the publication continued. The report also clarifies that the central bank bought $4.3 billion worth of gold over the period.
Russia grew as the world’s largest gold buyer after it spent more than $40 billion purchasing gold over the past five years. The central bank said that it stopped buying gold in the first half of last year to encourage miners and banks to export more and bring foreign currency into the country.
Russian President Vladimir Putin has made de-dollarization his country’s key policy in an effort to reduce the Russian economy’s exposure to dollar assets. The multi-year drive to lessen Russia’s vulnerability to U.S. sanctions comes amid deteriorating relations with Washington.
As announced last year that Russia and China had been collaborating to decrease their dependence on the U.S. dollar, and trade settlements in USD between the two countries had fallen under 50%.
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