Moscow: – The USD component in the Russian National Wealth Fund, created out of the foreign reserves, has been brought to zero. As per the information given in January 2021, the USD share in the National Wealth fund was to the extent of 35%. Russian President Vladimir Putin had initiated the process of de-dollarization in the last few years. But now, the USD has been expelled from the National Wealth Fund and has been replaced by Yuan, Euro and Gold. Bringing the USD component in the National Wealth Fund to zero is a crucial stage in the process.
Two months ago, Russian Prime Minister Mikhail Mishustin issued orders, allowing the National Wealth Fund to invest in Gold. After that, in June, Russian Finance Minister Anton Siluanov announced the complete elimination of USD from the National Wealth Fund. Finance Minister Anton Siluanov announced ‘The USD component in the National Wealth Fund will be brought to zero by the end of next month. Steps will be taken to expedite this process.’
Against this background, the Russian finance ministry has published a statement claiming that the USD component in the National Wealth Fund has been brought to zero from 35%. Along with the USD, even the GBP component has been brought to below 5%. At the same time, the shares of the Euro, Yuan and Gold have been increased. The Euro, Yuan and Gold shares have been raised to 39.7%, 30.4% and 20.2%, respectively. Share of the Japanese Yen has been kept at 4.7%.
The Russian finance ministry said, ‘For Russia, Euro and Yuan are alternative currencies for the USD. Both these currencies are of the biggest trading partners of Russia. Gold is a vital asset and becomes an important factor in the security of investment in the fund.’ The statement clarifies that bringing the USD component in the National Wealth fund to zero is by the geopolitical developments over the last few years and the decisions taken in the Russian economy regarding de-dollarization.
Russian President Vladimir Putin has taken aggressive steps in the last few years to reduce USD use. Only last year, he announced that the USD component in the foreign exchange reserves would be reduced. Accordingly, the Russian central bank has reduced the USD component by billions of dollars to bring it down below 10%. Against this background, complete elimination of the USD from the National Wealth Fund becomes significant.
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