Russia has dumped a significant portion of the greenback from its oil fund last month, in favour of other currencies amid tightening Western sanctions.
According to the Finance Ministry, Russia’s National Welfare Fund, which holds savings derived from Russia’s oil revenues, sold $5 billion in an effort to cut back its exposure to the US currency. The fund converted $1 billion into euros, and $4 billion into yuan, with forthcoming plans to eliminate the remaining $35 billion greenback holdings in the foreseeable future.
The latest move to reduce exposure to the US dollar in its currency reserves is in response to tightening Western sanctions. During a recent St. Petersburg Economic Forum, Russian President Vladimir Putin expressed that although the country does not want to completely eliminate its use of the greenback, ongoing sanctions have forced it to lean towards alternative payment methods.
Over the past several years, Russia has been on a strengthening path towards de-dollarization, and becoming increasingly less reliant on the world’s largest reserve currency. Earlier this month, Russia’s National Wealth Fund announced it will completely dispose of $40 billion worth of dollar-denominated assets from its sovereign wealth fund, citing heightened tensions with Washington.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.