Russia to expel USD from ‘National Wealth Fund’: Finance Minister

Moscow – Russian Finance Minister Anton Siluanov announced that Russia would expel the US dollar from the ‘National Wealth Fund’, being created from the reserves with the Russian government. This information was given in the St. Petersburg Economic Forum, which started in Russia. As per the information given in January 2021, a fund of USD 184 billion in the National Wealth Fund and 35% of this investment is in USD.

Russian President Vladimir Putin has initiated aggressive steps to reduce the exposure to USD. Last year itself, he had announced that the proportion of USD in the Russian reserves would be reduced. Accordingly, the Russian central bank has brought the US dollar component to below 10% of the reserves. Against this background, the announcement to eliminate USD from the National Wealth Fund becomes significant.

Finance Minister Siluanov gave information regarding the plan saying ‘The dollar component in the National Wealth Fund will be brought to zero by the next month. Steps will be taken to expedite this process. The Russian central bank also is implementing a process of this kind.’ Russian spokesman Dmitry Peskov, supported the decision saying ‘The process of reducing the US dollar component from the Russian economy is going on. Not only Russia, but many countries are also making efforts to reduce the USD dependence in their economies. This is becoming apparent.

As per the new structure, National Wealth Fund will have a 40% share in Euro. There will be 30% share in the Chinese Yuan. Investment in Gold will be nearly 20% and British Pound and Japanese Yen will constitute 5% each. National Wealth Fund has been created to counter any economic crisis and other related measures. Russian Prime Minister Mikhail Mishustin issued orders that reserve fund from this may be used for purchasing Gold, a perpetual safe asset, through the Bank of Russia.

The stock of Gold with Russia has reached 2,298 tonnes. The Russian foreign exchange reserves have crossed USD 600 billion, and the Gold component has reached more than USD 130 billion. The percentage of Gold in the reserves has reached 22 %, and for the first time in Russian history, the percentage of Gold in the reserves has gone above the USD.