Russia transfers $100 billion to other currencies
Russia's Central Bank has taken a major step to reduce its dependence on the US dollar by converting about $100 billion into euros, Japanese yen and Chinese yuan.
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| Russian ruble coins and US dollars. Photo: AFP/TTXVN |
RT (Russia) reported that according to the latest quarterly report just released by the Central Bank of Russia, with this move, the proportion of USD in Russia's foreign currency reserves has decreased sharply in just 3 months from March to June 2018, down from 43.7% to a new record low of 21.9%. This report was published with a 6-month delay.
Most of the money withdrawn from the USD reserves will be reallocated to increase the share of the euro in Russia's foreign currency reserves to 32% and the Chinese yuan to 14.7%. Another 14.7% will be invested in other foreign currencies such as the British pound (6.3%), Japanese yen (4.5%), Canadian dollar (2.3%) and Australian dollar (1%).
According to the report, the total reserve assets of the Central Bank of Russia, including gold and foreign currency reserves, increased by 40.4 billion USD from July 2017 to June 2018, reaching 458.1 billion USD.
Russia had previously begun an unprecedented exodus from US Treasury bonds in April and May 2018 amid rising tensions with the US. The country dumped $81 billion in US Treasury bonds at the same time Washington imposed sanctions on Russian businessmen, companies and government officials.
The Kremlin has publicly stated that US sanctions and pressure are forcing Russia to find alternative payment currencies to the US dollar to ensure the security of the country's economy.
Russian Deputy Foreign Minister Sergei Ryabkov recently announced that Russia will respond to US sanctions and is specifically stepping up efforts to abandon the US dollar in trade transactions. "It's time to move from words to actions, and moving away from the dollar is a reciprocal measure, while considering other measures," Ryabkov said in the International Affairs magazine. Russian Energy Minister Alexander Novak also recently noted that more and more countries are interested in replacing the dollar as a medium of exchange in global oil and other transactions.
The Russian government is also drafting a plan to limit payments in USD to create optimal conditions for payments in the domestic currency ruble. Russia's main trading partners are currently China and the European Union (EU). According to this plan, Russia will gradually increase payments in Chinese yuan (CNY) and euros with these two partners. With partners in the Eurasian Economic Union (EAEU), Russia will use rubles.
